马耳他的增长风险：探索宏观金融因素对增长的影响

Malta’s Growth-at-Risk:Exploring the Effects ofMacro-Financial Factorson Growth Fuad Hasanov SIP/2026/022 IMF Selected Issues Papers are prepared by IMF staff asbackground documentation for periodic consultations withmember countries.It is based on the information available atthe time it was completed on January 20, 2026. This paper isalso published separately as IMF Country Report No 26/30. 2026MAR IMF Selected Issues PaperEuropean Department Malta’s Growth-at-Risk: Exploring the Effects of Macro-Financial Factors on GrowthPrepared by Fuad Hasanov* Authorized for distribution by Nick GigineishviliMarch2026 IMF Selected Issues Papersare prepared by IMF staff as background documentation for periodicconsultations with member countries.It is based on the information available at the time it wascompleted on January 20, 2026. This paper is also published separately as IMF Country Report No 26/30. ABSTRACT:This paper employs a Growth-at-Risk (GaR) framework to assess the impact of macro-financialvariables on the growth rate distribution of Malta over a one-to-two-year horizon. The analysis suggests thatwhile the baseline outlook is positive, large tail risks are associated with the domestic risk factors related toresidential housing prices and household credit. Conversely, external factors from the Euro Area are likely tohave a smaller direct impact on the growth rate distribution, transmitted through financial conditions in the bloc. RECOMMENDED CITATION:Hasanov, Fuad, 2026, “Malta’s Growth-at-Risk: Exploring the Effects of Macro-Financial Factors on Growth,” Selected Issues Paper 2026/022. Malta’s Growth-at-Risk: Exploringthe Effects of Macro-FinancialFactors on Growth Prepared by Fuad Hasanov GROWTH-AT-RISK: EXPLORING THE EFFECTS OFMACRO-FINANCIAL FACTORS ON GROWTH1 This paper employs a Growth-at-Risk (GaR) framework to assess the impact of macro-financialvariables on the growth rate distribution over a one-to-two-year horizon. The analysis suggests thatwhile the baseline outlook is positive, large tail risks are associated with the domestic risk factorsrelated to residential housing prices and household credit. Conversely, external factors from the EuroArea are likely to have a smaller direct impact on the growth rate distribution, transmitted throughfinancial conditions in the bloc. A.Introduction 1.A Growth-at-Risk (GaR) framework is helpful to analyze the vulnerability of Malta'seconomic growth to financial and macroeconomic shocks. Traditional macroeconomic forecaststypically provide a "point estimate," a single number (or path of single numbers) predicting the mostlikely outcome for GDP growth (the baseline projection). These point forecasts often fail to captureuncertainty surrounding the economic outlook, particularly "tail risks" that arise during periods offinancial stress or external shocks. GaR addresses this limitation by linking current financial andeconomic conditions to a probability distribution of future real GDP growth. In addition, thelikelihood of extreme negative growth scenarios, specifically, how much growth is "at risk" at the 5thor 10th percentile of the distribution, may be estimated. In other words, instead of only forecastingthe most likely (average) growth rate, GaR evaluates the probability distribution of future growthoutcomes. The key GaR metric – “growth-at-risk” – shows the lowest GDP growth rate with only a5 percent chance of being even lower. For example, if GaR is 2 percent, it means that there is a5 percent probability that growth will fall below 2 percent over the specified horizon, generally oneor two years. B.Strong Growth in Credit and Housing Markets 2.Malta’s economy has been one of the fastest growing in Europe over the past decade.Real GDP growth averaged close to 7 percent per year from 2013 to 2019 and remained above5 percent in 2020-2024, propelled by labor-intensive services sectors like tourism, gaming, andprofessional services, alongside a strong influx of foreign workers that expanded capacity. Growth in2025 moderated to its estimated potential rate of about 4 percent, still significantly higher than theEU average. Unemployment is at historic lows of about 2.9 percent, and inflation has receded toaround 2–3 percent, underscoring the favorable macroeconomic environment (Figure 1). 3.Malta is a highly open economy, making it sensitive to external macroeconomic factors.With total exports of goods and services at about 120 percent of GDP and service exports(tourism, remote gaming, finance, etc.) dominating trade, Malta’s economy is sensitive to Europeanand global economic conditions. Risks include a sharp Euro Area slowdown, which would affecttourism and business services demand, and global financial market volatility such as a sudden risk-off event causing a Euro-wide credit crunch. Additionally, higher energy prices or geopoliticaltensions could impact Malta directly and indirectly. Malta’s current account surplus of around 6-7percent of G