PM promises positive surprises in expansionary Budget
Prime Minister Robert Abela has promised that the October 26 Budget will “surprise in the positive”, despite the international crisis, insisting that the government will continue protecting households and supporting economic growth. Speaking to TVM News head Owen Galea on Sunday, Abela described the Budget as expansionary, saying income tax cuts for parents would continue from January 1, alongside pension increases and cost-of-living adjustments. He ruled out changes to VAT and social security contributions and gave a “clear and absolute guarantee” that electricity, water, gas and fuel prices would remain stable. His upbeat message contrasted with Finance Minister Clyde Caruana’s emphasis on spending priorities and fiscal responsibility. Energy subsidies are expected to cost €400 million this year and a similar amount next year, subject to international conditions. Abela said the deficit would remain below 3% of GDP. (Maltatoday)
Alex Borg renews call for cross-party agreement on mass transport
Opposition leader Alex Borg has renewed his offer to sign a memorandum of understanding with the government to ensure that a mass transport project can proceed across successive legislatures, arguing that traffic requires a long-term, bipartisan solution. Speaking on NET TV on Sunday, Borg said both parties needed to sit down and agree on the best system for Malta, acknowledging that such a project could begin under one administration and be completed under another. He described traffic as a major national challenge with physical and psychological consequences. Ahead of Budget 2027, the Opposition leader said that this excercise could also be a good opportunity to project national unity. Borg pledged that he will support budget measures that show a long-term vision. (Times of Malta)
DBRS maintains Malta’s A rating but flags spending pressures
Credit rating agency Morningstar DBRS has affirmed Malta’s A (high) credit rating with a stable outlook, citing strong economic growth, moderate public debt and a resilient banking sector, while warning that energy subsidies and rising public expenditure will put pressure on government finances. Malta’s economy grew by 4.4% in the first half of 2026, compared with 1.2% across the European Union. Growth was supported by domestic consumption, employment, investment and tourism, with tourist arrivals increasing by 18.6% in the first seven months. The Central Bank expects the economy to expand by 3.8% this year and 3.6% in 2027. However, DBRS expects the deficit to rise this year, with energy subsidies projected to reach 1.4% of GDP. Public debt stood at 45.9% of GDP in March, below the EU average of 66.8%. The agency also highlighted Malta’s rapid population growth, productivity challenges, property exposure among banks and weaknesses in governance and corruption controls. (TVM News)
