The International Monetary Fund has warned that Malta \u201ccannot sustain further substantial population and labour force growth through immigration.\u201d<\/p>\n
In its February country report<\/a>, the IMF said that without major policy changes and structural reforms, a slowdown in labour force growth would eventually curb the country\u2019s economic potential and limit future growth.<\/p>\n \u201cWithout adequate policy and structural reform measures, the inevitable deceleration in labour force growth would weigh on potential output and limit actual growth,\u201d the IMF said.<\/p>\n Malta already has the highest population density in the EU, and while labour-driven growth fuelled by immigration is expected to continue in the medium term, it is forecast to slow in the years ahead, the IMF said.<\/p>\n Malta’s population <\/a>hit 574,250 by the end of 2024, marking a 1.9 per cent increase over the previous year, according to the latest available data released in July last year.<\/p>\n The growth was largely fuelled by net migration, which accounted for 10,614 additional residents. Of these, more than three-quarters (76.6 per cent) were non-EU nationals, highlighting the continued role of third-country migration in shaping Malta\u2019s demographic landscape.<\/p>\n Of the total population, 70.6 per cent are Maltese citizens while 29.4 per cent are foreign citizens.\u00a0<\/p>\n On the positive side, the IMF highlighted Malta\u2019s \u201crobust economic performance\u201d which has continued despite global uncertainties, maintaining growth rates that exceed the EU average and a \u201csustainable\u201d public debt.<\/p>\n \u201cGrowth is expected to slow to its potential rate of four per cent as labour-led expansion, supported by immigration, moderates, and gaming and tourism sectors reach saturation,\u201d the IMF said.<\/p>\n It recommended policy priorities should focus on further strengthening fiscal buffers for \u201cfuture shocks\u201d while creating room for investment in infrastructure, human capital and innovation.<\/p>\n \u201cLong-term growth will depend on reforms that boost productivity and address structural challenges,\u201d the IMF said.<\/p>\n It highlighted banks\u2019 \u201csignificant exposure<\/a>\u201d to property loans poses a vulnerability to Malta\u2019s financial sector.<\/p>\n