The annual convening of the opinions and recommendations of the Malta Council for Economic and Social Development (MCESD) culminated in the freshly released Annual National Productivity Report 2023, presented to the nation today. Matters of an economic and social nature are contemplated in order to identify the primary challenges facing Malta, and the policy responses required thereto.

Compared to other European countries, Malta’s economy has been observed to linger behind in terms of labour productivity, which raise several queries with respect to the symbiotic relationship between wages and productivity. Thus, this relationship has been designated as the central focus of discussion within this edition.

Notwithstanding, the positive economic developments over 2022 would not go unmentioned, including the fact that Malta’s economy recorded one of the lowest rates of unemployment in the EU (2.9%), and a grossly greater real GDP growth rate (7.08%), relative to the EU average (3.41%).

These were compared with the realities of 2023, amidst the global disruptions of war and strife, leading to an inflation rate of 4.3%, above the Euro Area average of 2.9% recorded in October 2023. The main drivers of these inflationary pressures would be energy and, especially, food.

The following ten recommendations emerge from the report:

1. Improve Productivity and Wages in Low-Skilled Jobs
2. Promote Widespread Investment in Research and Development (R&D)
3. Learn from Past Successes and Foster Innovation
4. Fine Tune Malta’s Economic Growth Model
5. Embrace Social Partner Involvement and Collective Bargaining
6. Prioritise Consolidation and Specialisation in High-Productivity Sectors
7. Strategically Attract and Develop New Economic Sectors
8. Enhance Manufacturing Productivity through Investment and Incentives
9. Promote Best Practices and Knowledge Sharing in Manufacturing
10. Elevate Skills and Working Conditions in Labour-Intensive Sectors

The Full Report can be found here: https://nationalproductivityboard.gov.mt/wp-content/uploads/2024/03/NPB-Annual-Report-2023.pdf