Mr President, thank you. Since this is my first time addressing the House, I wish to join my colleagues in congratulating you on your appointment. Certainly, I extend my best wishes and take this opportunity to thank the electorate and personally thank the people of the second and ninth districts, where I contested and was also elected in a casual election.

Mr President, although I once viewed the highest institution of our country from the outside, today I have the privilege of serving the people from within. For this reason, I wish to speak briefly about some topics touched on last Saturday by H. E. the President of Malta, including the economy. When we speak about the economy, we must understand not only the mathematical principles behind it but also the philosophical foundations that shape it. The economy is complex, but we cannot ignore the basics. It is dynamic, not static. We cannot wake up, imagine something, and state it in a context that makes no sense. When I hear colleagues speak about a better quality of life, we must provide context. A better quality of life depends on generating wealth, and wealth comes from economic growth. It is an illusion to claim otherwise. This is simple to understand. If a family works harder year after year to increase its wealth, it does so to improve its economic situation and that of its children. Why? Because if their children ask for help, they can give it. The same applies to the economy. You cannot help your children if you do not generate wealth. The same applies when giving back to the people.

Mr President, let me give some context. When the Labour Party took the helm in 2013, the economic trajectory was very different. The economy stood at €7 billion; today, it is valued at more than €23 billion, having tripled. At that time, we discussed different priorities because the economic context was different. In 2013, we could not speak about the priorities we discuss today. Several families and businesses did not have enough liquidity to cover their electricity and water bills. That is in the past now, and the people want to look forward. Yet it is our duty to present the full picture, not half of it, if we truly want to improve on what has been done. Referring to what H. E. the President said, we all agree the environment must be given priority. The environment is an integral part of social justice. You cannot achieve social justice if you do not respect the environment around us. My work today as an economist is to integrate climate, environmental, social, and governance risks into the banking and financial industry. When I look at the Labour Party’s Int Malta manifesto, I see that the priorities we discuss – those that matter to the people – are written there in consolidated proposals.

In 2013, we needed to accelerate economic growth to exit the excessive deficit procedure and sustain our economic sovereignty. The European Commission could revoke all our economic and fiscal freedoms by rejecting our national budget if the fiscal situation were weak. The context was different then because the economic situation did not allow what we do today. It is good that today we speak about what we want, sometimes with a full list, even an à la carte menu. But back then, we discussed how people would cope with energy price instability being passed onto them. As politicians, we must be responsible. What we say must respect people and provide a proper context.

Let me speak briefly about the environment. The environment is borrowed from future generations. We cannot continue treating it in isolation. I accepted the invitation to contest the election with the Labour Party because the Int Malta manifesto addresses the environment, social policy, and governance in a holistic, integrated, and balanced way. The ambitious Well-Being Index will give a different dimension of measurement, not to diminish the importance of economic growth, but to complement it. This index, for the first time, binds a governing party to greater scrutiny. One of the ten dimensions – the second – is the quality of the local environment. We must protect what shapes our culture, natural capital, and identity. Moreover, as politicians, we must be empathetic to people’s needs and protect the sense of community that complements our well-being. The Labour Party in government has delivered much on the social front in recent years. Social policy is close to my heart, and we must treat it in an integrated way alongside the environment, not in isolation. We can do this because we have generated wealth over the years.

I welcome H. E. the President’s remarks on affordable housing. It is a theme I have campaigned on for the past four years. I am pleased this important theme now features prominently in the Int Malta manifesto as a support measure, complemented by the Well-Being Index under Dimension 5. We must never stop addressing this theme. We must also ensure any anomalies are corrected and push harder to balance housing market speculation by accelerating the supply of affordable accommodation. Mr President, I come from a generation that had to work hard to go farther in life. We lived without technology and went through a full transition. That transition brought improvements in how we live and greater efficiency. But every efficiency we try to maximise works against us in the sense that the more we want, the more we lose the sense of community we were raised in, not because we want to, but because we accelerate the pace of life.

In economics, we call this the J-Curve Paradox or, in simpler terms, human nature wanting more. We cannot say this happened because the government grew the economy. On the contrary, today we are in a better economic position because, as a nation, we seized every opportunity – whoever created them. Now that we are in a different economic position, we must take the next step and speak about sustainability, including environmental sustainability, which means a better quality of life. We must ensure that what we plan today – even in architecture – respects the country’s character, and this priority must be given. As politicians, we have the moral duty not only to make decisions and speak with conviction but also to understand, explain, and propose solutions. A country’s success does not come from partisanship but from reaching compromises. Compromises for the good of the people must be the norm of this House, not the exception. If we do not protect future generations, we will be remembered as weak. When the electoral campaign opened, there was a national consensus that the economy was strong, securing the Labour Party’s re-election for the good work it had done.

Mr President, maturity dictates we must move away from populist narratives. We must never speak disparagingly about those who help us grow and generate economic wealth – especially workers, whoever they are. The economy is built on capital and labour. In this context, I appeal that when irregularities occur, we address the irregularities – not the person or their nationality. Human dignity must be fully preserved and respected. In a geopolitically turbulent world that has changed how we live as a continent and nation, we must be even more careful with our words. As a nation, we have always been welcoming, and we must avoid turning workers or businesses into scapegoats through narratives unworthy of this Parliament. Being here is a privileged position. Mr President, from here I appeal that whenever we have discussions, we act with maturity, consider what we say, and return to the ideological principles we believe in – not only as political parties but as a nation within the European Union.

Thank you.

The post My maiden speech first appeared on The Malta Business Weekly.

The Gozo Tourism Operators Performance Review 2025, based on a survey of 80 tourism-related businesses conducted in April this year, paints a largely positive picture of the island’s tourism industry. However, it also highlights persistent challenges linked to operating costs, labour shortages and infrastructure.

The report found that 56% of respondents experienced an improvement in business performance during 2025 when compared to the previous year. A further 30% reported no significant change, while only 14% said their performance had deteriorated.

Among the six tourism categories surveyed, tourist attractions and activities emerged as the strongest-performing segment, with 76% of operators reporting better results than in 2024. Tourism and travel services followed closely, with 75% registering improved performance.

On the other hand, food and beverage establishments recorded the highest proportion of businesses reporting a decline in performance, at 22%. Transport and mobility services followed with 20%, while collective accommodation establishments such as hotels, boutique hotels and guesthouses recorded an 18% decline.

The report underlines the importance of international visitors to Gozo’s tourism economy. More than three-quarters of respondents, 77%, said foreign markets had a positive impact on their business performance during 2025. Of these, 45% described the impact as “good”, while another 32% considered it “excellent”.

Tourist attractions and activity providers, including diving centres and cultural attractions, were particularly upbeat about international demand, recording the highest share of “excellent” ratings.

The strength of foreign demand was also evident when operators compared 2025 with the previous year. Most respondents reported that the contribution of foreign markets had improved, while only 13% believed the impact had worsened. The report notes that negative shifts in foreign demand were relatively limited.

Non-collective accommodation providers, including self-catering apartments, villas and farmhouses, reported the most stable situation, with more than half indicating that the contribution of foreign markets remained unchanged from 2024.

Domestic tourism also played an important role, although its contribution was noticeably weaker than that of international visitors.

The survey found that 45% of respondents described the impact of the domestic market as “good”, while 44% rated it as “average”. Just 11% considered local demand to have had an “excellent” impact on their business.

Interestingly, those who awarded the domestic market an “excellent” rating were concentrated mainly within the food and beverage sector, suggesting that local visitors continue to play an important role for restaurants and bars.

When compared with 2024, most operators said the contribution of domestic demand remained stable. Some 68% reported no change, while 23% said the impact of local demand had increased. Only one in ten respondents reported a decline.

The positive performance trends translated into stronger revenues for many businesses.

Three-quarters of survey participants rated their revenue generation during 2025 as either “good” or “excellent”. Specifically, 65% selected “good” and a further 10% selected “excellent”, while the remaining quarter described revenue generation as average.

The transport and mobility services sector stood out as the weakest performer in this regard, with 60% of respondents in that category reporting only average revenue generation.

Overall, revenues improved compared to 2024, with only 15% reporting a decline. Nearly one-third said revenues remained unchanged.

The report attributes part of this improvement to stronger performance during the festive season at the end of 2025.

Perhaps more significantly, the findings suggest that revenue growth was driven by increased demand rather than higher prices. Among businesses that reported higher revenues, 71% said the improvement resulted primarily from an increase in clientele rather than price adjustments.

This indicates that growth was largely demand-led, reflecting stronger visitor numbers rather than inflation-driven revenue gains, the report said.

The survey also examined how businesses perceived the development of their operations over the course of the year.

Most operators reported that their businesses had improved during 2025. Tourism and travel services led the way, with 75% reporting operational improvements. Collective accommodation and tourist attractions and activities both recorded improvement rates of 65%.

Only 8% of respondents reported deterioration in business operations, with transport and mobility services again emerging as the most challenged sector.

Despite the generally positive performance, tourism operators identified several significant obstacles affecting their businesses.

Rising operating costs were by far the most frequently cited challenge, mentioned by around 71% of respondents. The report links this concern to wider inflationary pressures and volatility in international energy and transport markets.

Labour shortages remain another major concern. More than half of respondents identified staff shortages as a key issue, while a similar proportion pointed to difficulties associated with foreign work permits.

These labour-related challenges were particularly acute in the food and beverage sector and among transport and mobility operators.

Infrastructure concerns also featured prominently, with 40% of respondents identifying them as a challenge. Within the transport and mobility category, the figure rose to 60%, highlighting the sector’s dependence on road networks and connectivity.

Additional concerns raised by operators included increasing competition in the non-collective accommodation market and the growing prevalence of day-trippers, which may limit spending on accommodation and other tourism services.

The report concluded that Gozo’s tourism sector maintained a positive trajectory throughout 2025, supported by strong international demand and improved revenue performance. However, it also warns that structural challenges linked to costs, labour availability and infrastructure continue to affect businesses and could influence future growth if left unaddressed.

The post Majority of Gozo tourism businesses saw performance improve in 2025 first appeared on The Malta Business Weekly.

Artificial Intelligence has rapidly become a standing agenda item in boardrooms across the world. Yet while many discussions focus on the technology itself, the more important questions are around leadership, governance and judgement.

The same is true of cyber security. Most directors recognise the threat posed by cyber-attacks, but many continue to view cyber risk as an IT matter rather than a business issue. In reality, both AI and cyber security have become matters of strategic importance that require active board oversight.

Recently, I’ve observed a growing divide between organisations that see technology as a source of competitive advantage and those that view it primarily as a source of risk. The most successful organisations understand that it is both.

For boards, the challenge is not becoming experts in artificial intelligence or cyber security. The challenge is ensuring that the right questions are being asked and that management is approaching both opportunity and risk in a disciplined way. Artificial intelligence offers significant opportunities for businesses of all sizes. It can improve productivity, enhance customer experience, support decision-making and create entirely new products and services.

In Malta, board oversight of technology is bound to become increasingly important. Many of its successful businesses have grown from entrepreneurial, founder-led organisations into more sophisticated enterprises operating across multiple jurisdictions. As organisations scale, the risks associated with cyber resilience, data governance and the use of artificial intelligence will become more significant. The challenge for these companies will be to support innovation and growth while ensuring that governance frameworks evolve at the same pace. This is not about slowing change; it is about ensuring that change is sustainable, responsible and aligned with the organisation’s long-term objectives.

The enthusiasm surrounding AI can sometimes however obscure important governance questions. How reliable is the information being generated? What controls are in place? How are customer data and privacy being protected? Are employees receiving appropriate training? What reputational, regulatory and financial risks might arise if systems fail or produce inaccurate outputs? These are not technology questions. They are board level questions.

Similarly, cyber security is no longer simply about protecting systems. It is about protecting customers, employees, reputation and ultimately shareholder value. When organisations experience significant cyber incidents, the consequences extend well beyond operational disruption. Customer trust can be damaged, regulatory scrutiny can increase, and recovery costs can be substantial. In some cases, the reputational impact can last for years.

Boards therefore need confidence that cyber resilience is being treated as a strategic priority. This does not mean reviewing technical specifications or software architecture. It means understanding the organisation’s most critical vulnerabilities, ensuring adequate investment and testing whether management is prepared to respond effectively if an incident occurs.

One of the most common mistakes I’ve observed is that technology discussions are often delegated to IT specialists. Expertise matters, but boards must avoid creating a situation where only a handful of individuals understand the risks and opportunities being discussed.

The role of the board is not to provide technical solutions. It is to exercise oversight, challenge assumptions and ensure that technology decisions align with the organisation’s strategy, values and risk appetite. This is particularly important for chief executives. Many first-time CEOs are leading organisations through a period of technological change unlike anything previous generations have experienced. They are expected to make decisions about AI, cyber resilience, data governance and digital transformation while simultaneously managing growth, culture, regulation, sustainability and stakeholder expectations.

The best CEOs do not pretend to have all the answers. Instead, they build diverse leadership teams, seek external perspectives and create an environment where difficult questions can be raised openly.

The question therefore is no longer whether artificial intelligence and cyber security should feature on the board agenda. They already do. The real question is whether boards are equipped to govern them effectively. Technology will continue to evolve, often faster than regulation and sometimes faster than organisations themselves. In that environment, competitive advantage will not come from having the newest technology. It will come from having the judgement, leadership and governance to use it wisely. Ultimately, AI and cyber security are not technology issues at all. They are tests of a board’s effectiveness.

The post AI, cyber and the boardroom: Why technology is now a leadership issue first appeared on The Malta Business Weekly.

The standout indicator for business-to-consumer (B2C) operations is the robust acceleration of private consumption expenditure, which is projected to grow by 4.2% in 2026 (up from 3.3% in 2025) and maintain a robust ~4% annualised trajectory through 2028. This domestic spending engine is heavily underpinned by expansionary fiscal policy, specifically the widening of income tax brackets for parents announced in the 2026 Budget. This measure directly inflates household real disposable income by 4.9% in 2026.

This means that retail, fast-moving consumer goods (FMCG), entertainment, and local service providers can expect steady domestic demand. Although consumers are expected to save a portion of their tax windfall – pushing the household saving ratio to 20.7% in 2026 – overall purchasing power remains insulated against the severe stagflationary trends observed in the wider Eurozone.

Gross fixed capital formation (GFCF) is supposedly going to bounce back dramatically to 6% growth in 2026, rebounding from a slight contraction (-0.1%) in 2025. This surge is public-led, driven by massive EU-financed outlays under the Recovery and Resilience Facility (RRF), coupled with strategic national infrastructure like the second Malta-Sicily electricity interconnector. Private sector injections are reinforced by targeted Budget 2026 tax incentives designed to catalyse corporate investment. However, this growth rate is highly front-loaded, with GFCF growth projected to drop sharply to 1.4% in 2027 as RRF projects face their mandatory 2026 completion deadlines.

B2B suppliers, construction firms, and tech infrastructure partners should maximise order books in 2026. For general businesses, utilising current fiscal incentives to invest in automation and clean energy is vital to offset the medium-term drop in public investment and combat persistent operational cost increases.

The primary operational risk for Maltese firms remains the acute labour shortage. Total employment growth is cooling down from 3.9% in 2025 to 2.7% in 2026, and eventually to 2.3% by 2028. Concurrently, the unemployment rate is projected to linger around a historically low 2.8% to 2.9% across the forecast horizon. Because the unemployment rate is persistently below the structural Non-Accelerating Inflation Rate of Unemployment (NAIRU), estimated at 3.1%, labour market tightness will continue to drive aggressive wage demands. Compensation per employee is forecast to increase by 4.4% in 2026 and 4.5% in 2027, leading Unit Labour Costs (ULC) to rise by 3.4% and 3.5% respectively.

Faced with these figures, Maltese businesses have effectively hit a structural ceiling for labour-driven scaling. Relying on endless headcount growth or importing foreign talent to absorb operational inefficiencies is no longer a viable corporate strategy. To protect operating margins from a severe wage-cost spiral, Maltese enterprises have no option but to invest heavily in streamlining their internal processes and deploying advanced digital solutions wherever possible.

This shift necessitates an immediate transition away from manual, labour-heavy workflows toward automated systems, enterprise resource planning (ERP) platforms, and cloud-based AI tools. Businesses must systematically audit their internal supply chains, CRM mechanisms, and administrative workflows to eliminate redundancies. In this high-wage environment, digital transformation is no longer a luxury or a long-term goal, it is an immediate operational necessity. Capital expenditure must be aggressively redirected away from expanding headcounts and toward enhancing the output per employee through technology, ensuring that revenue growth is decoupled from labour dependency.

As labour cost pressures will remain elevated and structurally irreversible, Maltese businesses must treat process re-engineering and digitalisation as their primary defensive strategy. By shifting capital from headcount expansion to operational automation, companies can compress administrative overheads, boost productivity, and insulate their bottom lines from mandatory wage adjustments.

Headline HICP inflation is projected to nudge upward slightly to 2.5% in 2026 and 2027, before easing to 2.2% in 2028. This trajectory is deeply influenced by the escalation of the Middle East conflict, generating significant upward pressure on imported goods and processed food prices via disrupted trade channels. Crucially, the Maltese government has reiterated its ironclad commitment to maintaining stable retail energy tariffs, effectively shielding local firms from global spikes in oil and natural gas prices (with technical assumptions placing oil at $96.9/barrel in 2026).

While local utility expenses are safely predictable due to government subsidies (costing public finances 0.8% of GDP in 2026), international freight, raw materials, and components will demand robust supply-chain hedging and dynamic vendor management to protect corporate profitability.

The Central Bank has explicitly modelled alternative outcomes based on the progression of the Middle East conflict. Given the extreme sensitivity of global shipping routes through the Strait of Hormuz, business leaders should stress-test their operations against the CBM’s Severe Scenario. If the conflict intensifies further, oil could surge to $166/barrel and gas to €111/MWh. For Malta, the resulting contraction in Eurozone demand would pull domestic GDP growth down sharply to 3.1% in 2027 while driving local HICP inflation up to a painful 3.4% due to severe indirect spillovers from trading partners.

In conclusion, Maltese businesses should utilise the current stable baseline of 2026 to build cash buffers, review alternative non-Middle Eastern logistics networks, and optimise operational efficiencies. Maintaining financial flexibility today is the best insurance against the volatile macroeconomic scenarios of tomorrow.

The post Business resilience first appeared on The Malta Business Weekly.

The review examined the frameworks and controls adopted by banks to identify, assess and mitigate these risks, which the regulator described as significant and constantly evolving threats to the integrity of the financial system.

In its letter, the MFSA highlighted a number of supervisory observations, examples of good industry practice and areas where further improvements are expected. The exercise builds on a similar review carried out in 2025 among financial institutions and crypto-asset service providers.

The authority noted that recent reports by the Financial Action Task Force (FATF) point to increasing links between traditional financing methods and emerging digital technologies, as well as growing sophistication among those seeking to evade sanctions and proliferation financing controls.

Against this backdrop, the MFSA said credit institutions must maintain robust and adaptable systems capable of effectively addressing terrorist financing, proliferation financing and sanctions-evasion risks.

Among its key observations, the regulator found that banks generally demonstrated strong alignment with Malta’s National Risk Assessment. It said institutions should continue incorporating both national and supranational risk assessments into their business-wide and jurisdictional risk frameworks.

The authority also stressed the importance of giving terrorist financing, proliferation financing and sanctions-evasion risks distinct consideration within internal risk-management systems, while continuing to apply proportionate and risk-based measures to prevent breaches or circumvention of restrictive measures.

The use of artificial intelligence was another area highlighted in the review. The MFSA said institutions deploying or considering AI solutions should have a clear understanding of how such systems operate, including their limitations, and should maintain comprehensive audit trails of alerts and decisions.

The regulator also underscored the need for ongoing, role-specific training programmes, particularly for employees working in higher-risk areas.

The MFSA encouraged credit institutions to review the findings alongside existing guidance issued by both the authority and the Financial Intelligence Analysis Unit (FIAU), with a view to strengthening their compliance frameworks and maintaining alignment with regulatory expectations.

The authority said insights gathered during the exercise may help shape its future supervisory approach to financial crime compliance.

The post MFSA issues guidance to banks on terrorism financing and sanctions risks first appeared on The Malta Business Weekly.

The figures emerge from the FIAU’s 2025 annual report published Tuesday, which highlighted the authority’s supervisory, enforcement and intelligence work in Malta’s efforts to combat money laundering and terrorist financing.

The FIAU said it received 10,712 suspicious transaction reports during the year, up from 9,430 in 2024, while carrying out 150 supervisory interventions across financial and non-financial sectors.

The report is themed “Behind Every Euro Laundered Lies a Victim,” which the FIAU said reflects the human impact of financial crime, including fraud, corruption, trafficking and exploitation.

In a statement accompanying the report, FIAU director Alfred Zammit said the authority’s work remained focused on protecting both Malta’s financial system and society from the proceeds of crime.

“Our work is purpose-led and human-driven: every improvement we make, every risk we mitigate, every suspicious report we analyse, serves people first,” Zammit said.

The report also outlines preparations for the European Union’s evolving anti-money laundering framework, including the establishment of the Anti-Money Laundering Authority (AMLA) and the implementation of the Sixth Anti-Money Laundering Directive.

The FIAU said it continued to participate in European discussions surrounding AMLA’s development, while Zammit was appointed vice-chair of MONEYVAL for the 2026-2028 term.

According to the report, fraud remained the most frequently reported suspected predicate offence, accounting for 28% all cases analysed by the FIAU, followed by tax crimes at 8%. 50% of the cases were registered as unknown, as the predicate offence could not be established.

The FIAU said preparatory work carried out during 2025 also paved the way for the introduction of a settlement process in April 2026, which it said would strengthen its ability to pursue timely and proportionate enforcement outcomes.

The report showed that suspicious transaction reports (STRs) have continued to rise steadily over recent years, increasing from 7,323 in 2021 to 10,712 in 2025. The FIAU said the latest figure represented a 13% increase over the 9,430 reports received in 2024.

Drug trafficking, sanctions circumvention and sanctions violations each accounted for 4% of reports.

The report also highlighted a sharp increase in reporting by crypto-asset service providers, which submitted 3,712 reports in 2025, more than double the 1,751 filed a year earlier.

While still among the largest reporting entities, reports from remote gaming operators have steadily decreased since 2022, filing 3,002 reports in 2025, down from 3,670 in 2024, while financial institutions submitted 2,098 and credit institutions 1,082.

In 2025, 67 reports were filed by accountancy and audit entities.

The FIAU said its intelligence work resulted in 4,351 disseminations to foreign financial intelligence units during the year. It also made 450 disseminations to the Malta Police Force, 493 to the Malta Tax and Customs Administration, and 258 to local supervisory authorities and other competent authorities.

On the supervisory front, the authority carried out 150 interventions targeting subject persons across both the financial and non-financial sectors. 32% of these consisted of thematic reviews, while 25% were full-scope onsite inspections.

Other interventions included thematic inspections (11%), targeted inspections (9%), policy and procedure reviews (7%) and supervisory meetings (1%).

As of December 2025, the FIAU was overseeing 2,150 subject persons. These included 562 entities within the financial sector and 1,717 within designated non-financial businesses and professions, including accountants, auditors, notaries, advocates, tax advisors, land based operations, land based casinos, corporate service providers, remote gaming companies, real estate agents and lawyers.

The report also provided an overview of the outcome of appeals lodged against FIAU penalties between 2018 and 2025.

There were appeals involving fines which amounted to €13,138,924 imposed by the FIAU. Between 2018-2025, €7.89 million in penalties were imposed in court revised fines.

The authority’s cash restriction section meanwhile investigated transactions worth €11.6 million during 2025. It received 88 reports and concluded 82 cases. Of these, 38 involved full investigations, while 25 were closed after investigators established that any cash payments involved were below the legal threshold.

Nine cases were resolved through administrative settlement and four were referred to other competent authorities.

The 82 cases concluded in 2025 included 214 persons, 112 transactions, 41 moto-vehicle transactions, 29 sea-craft transactions, 34 immoveable property transactions and eight transactions involving high value goods like antiques and works of art.

11 breaches of high value goods transactions were confirmed, involving transactions valued at €495,500 and a cash component exceeding €171,300.

19 administrative penalties amounting to €49,500 were issued in relation to those breaches in 2025.

Of the 11 breaches in 2025, five were motor vehicle transactions, five were seacraft transactions, and one was an immoveable property transaction.

Beyond its domestic operations, the FIAU said it continued preparing for the implementation of the European Union’s new anti-money laundering framework.

The authority participated in four Anti-Money Laundering Authority working groups covering nine different mandates and attended 38 related meetings, in addition to 36 AMLA network meetings.

The report also highlighted developments within the Centralised Bank Account Register, which provides authorised authorities with direct access to banking information.

In 2025, there were 37 reporting entities. Designated users from authorities who are eligible to access the CBAR directly include the FIAU, the Malta Police Force, the Asset Recovery Bureau, the Commissioner for Revenue, the Sanctions Monitoring Board and Security Services.

By the end of 2025, the register contained information on approximately 1.9 million IBAN accounts and covered a client base of around 1.26 million natural persons and 41,000 legal entities and arrangements.

Usage of the register decreased, with case-by-case searches dropping from 25,000 in 2024 to 21,000 in 2025. The number of designated users authorised to access the system grew from 97 to 118.

The post FIAU imposed €1.34 million in penalties as suspicious transaction reports rose 13% in 2025 first appeared on The Malta Business Weekly.

The system functions in such a way that, in a by-election, all candidates who fall during the counting process start from zero if the candidate ceding the seat was elected with no inherited votes from other candidate, irrespective of their first preference votes given to them by the electorate. Moreover, the reachable quota is half the official quota in the district plus one. The system is somewhat complex because, in the case of the seat vacated by Dr Grima, all candidates started at zero, and the same applied to that of the Prime Minister. However, if the ninth district had been counted before the second district, I would have started with 340 votes that I had transferred to Dr Falzon before my name fell on the day of the counting. This is a tricky part, and I would like to explain it further. On the day of the casual election, the Electoral Commission, in agreement with the Party’s representatives, follows a draw. It is literally like a Super Five chance. The order in which the districts of those who ceded their seats are counted is determined by sheer luck.

In my case, the first counting started with the seat vacated by Dr Grima, in which Rebecca Buttigieg was elected ahead of me with almost 90 votes. Then the second district followed, which was the seat vacated by the Prime Minister. In this case, I was not expecting to be elected after a few counts because the strategy employed during my campaign was to ask for the third and fourth preferences of other co-candidates rather than the second preference. The reason was that the first preference was always expected to be given to the Prime Minister, and the second preference to candidates who had toured and worked the district longer than I had. However, the game changer was the third and fourth preferences, which I asked many of my supporters and people on the ground to give me for an eventual by-election. And those were the third preferences of Ministers Clyde Caruana, Byron Camilleri and others. Indeed, the strategy worked, as I managed to garner most of the third preferences of the other candidates, in addition to extra second preferences after the Prime Minister. When the by-election of the Prime Minister opened, I was at around 1,250 votes. In the final count, I was elected from the second district, taking the seat vacated by the Prime Minister. Indeed, I am humbled.

After the second district was counted, the ninth district ensued. Obviously, my name was eliminated from the ninth district since I had already been elected on the second district. This opened the space for other candidates, in particular the mayor of Għargħur, Mariah Meli, who was the runner-up. If the ninth district following the by-election of Dr Falzon had been drawn to be counted before the second district, the story would have been different. Why? Because I would have been elected from the ninth district, while in the second district there would have been another name, given that my name would have been eliminated from the second district. Therefore, in truth, luck does favour you in such instances. This process is somewhat complex, and for this reason strategies differ from one candidate to another. In my case, since I submitted my nomination as a PL candidate later than others, it was not easy to compete in a district known for the big names. However, given that my profile and branding were already public due to the MEP elections campaign two years earlier, people seemed to have responded and voted for me as well, even if they were third and fourth preference. In truth, in the MEP elections I had around 36,000 second and third preferences and leveraged on this. Besides, I kept on listening to people’s concerns over the past two years and tried my best to assist where it was merited.

Certainly, I must thank the people who helped me achieve this result in just 21 days. We were a small group of volunteers across both the second and ninth districts. I did not even have an office when I submitted my nomination. In fact, we met at a restaurant in Marsaskala to devise a plan on how we would proceed with the campaign. Gradually, people started joining the team. We managed to achieve remarkable results in 21 days, even setting up my office in Bormla, which I own and which had been in a bit of a dilapidated state for two years. Thanks to my brother and a childhood friend, we completed it in a week. I must express sincere gratitude to several people, especially three close friends in the ninth district who truly supported me, and together we managed to garner around 562 first-count votes in that district. The people of the ninth district received me with enthusiasm, and that is something I truly cherish. It is a district that I will continue to represent for the next five years, just like the second district.

Lastly, I would like to make an appeal to those who were not elected. I firmly believe that you still have a lot to contribute. Had I given up after the MEP elections, I would not be here today. It is true that I was not originally planning to run for the current general election, and it is equally true that I was in the background supporting the PL. However, when the Prime Minister asked me several times to put forward my name as a candidate, I accepted. In the end, when the Party calls, we all contribute. Whether we contribute as frontline candidates, in logistics, customer care, or social media, we all play a role. And that is what truly matters. Your contribution is certainly valuable.

The post When loyalty is rewarded – thank you, Districts 2 and 9 first appeared on The Malta Business Weekly.

Compiled via the Short-Term Quarterly Economic Forecasting Model (STEMM), official figures project Malta’s real GDP to expand by 3.7% in 2026. This aligns perfectly with projections from the IMF and the Central Bank of Malta. However, underlying drivers have mutated significantly. Output in 2026 is driven entirely by domestic demand (+3.8 pps), while net exports act as a drag, subtracting 0.1 pps . This dynamic reflects a deteriorating international climate triggered by military conflict in the Middle East from late February 2026, which closed the Strait of Hormuz and disrupted global shipping lanes.

While Malta’s direct trade exposure to the Gulf region is minor—representing 2.5% of goods exports (€84.6 million) and 0.7% of imports in 2025 —secondary transmission channels are pronounced Surging transport costs, freight shocks (reflected in a 20%+ increase in the Baltic Dry Index), and supply chain disruptions penalize primary trading partners. Growth projections for major Eurozone markets, particularly Germany (which commands 20% of Malta’s total export demand), have been sharply downgraded, compressing external demand for Maltese goods and service.

While validating headline GDP, the Council highlights explicit concerns regarding the balance of domestic expansion, noting strong tension between projected investment and consumption patterns.

• Private Consumption (+3.9%): Highly resilient, backed by a tight labour market, public-sector collective agreements, and revised parental tax brackets.

• Gross Fixed Capital Formation (+6.5%): MFIN expects a major turnaround from recent investment contractions, driven by an ambitious nominal public investment target of €900 million (+18.6% nominal increase) and robust private sector expansion (+7.0%).

• Government Consumption (+5.7% Real / +8.0% Nominal): Elevated, led by a 4.1 pps expansion in employee compensation, though decelerating slightly from 2025.

The Council cautions against institutional over-optimism. Over the past three fiscal years, actual public investment consistently fell short of targets by an average of €200 million annually, hitting a rigid delivery ceiling of roughly €750 million per year. This reflects deep capacity constraints and execution challenges across advanced infrastructure programs. Conversely, notable upside risks reside in general government consumption. State models assume intermediate consumption growth will fall to 4.1%, contradicting the 16.2% average annualized growth seen over the past three years. Given relentless demand pressures across state medical systems and public service contract indexing, the Council expects government consumption to exceed estimates, offsetting underperforming capital outlays.

Malta’s 2026 data reveals a deeply embedded structural contradiction—a core friction in the current economic architecture. This friction is best understood through cost-driven pricing pressures, full employment tightness, and the business cycle output gap.

Headline HICP inflation is projected to reach 2.9% in 2026, a 0.7 percentage point upward revision from autumn baselines . Crucially, this spike is not an excess demand byproduct; it is purely cost-driven and structural, reflecting global import pipeline shocks. Rising freight metrics (the Baltic Dry Index jumping over 20%) and a 50% spike in international agricultural fertilizer costs have driven up production cost bases globally. Core inflation tracks closely at 2.8%, proving that import pipeline pressures flow steadily into local services and consumer goods Malta’s headline rate would be much higher without state intervention as government maintains strict price caps on domestic energy utilities and retail fuel via open-ended fiscal subsidies. While this shields household budgets, it shifts a heavy financial burden onto the state balance sheet, generating an accumulating fiscal liability demanding future consolidation.

Simultaneously, the labour market runs exceptionally hot, featuring historic highs in labour utilisation and negligible slack. Full-time equivalent employment is forecast to expand by 3.6% in 2026, absorbing a net 12,326 workers into the economy  and holding national unemployment at an ultra-low 3.2%. Because the domestic labour supply is fully utilised, this relentless demand has triggered robust wage acceleration (+4.4% nominal compensation per employee). Furthermore, since local headcount cannot expand organically, further expansion relies entirely on foreign inward migration, worsening spatial and infrastructural strains.

The core of the MFAC report is a detailed critique of Malta’s long-term reliance on factor accumulation—specifically demographic expansion—to fuel GDP growth. Over the last decade, real GDP growth averaged an exceptional 6.5%, driving a successful real convergence that brought GDP per capita to approximately €35,000 in 2025. However, a decomposition of this growth shows that it was disproportionately driven by labour supply increases rather than structural efficiency. Between 2015 and 2025, expanding labour force participation accounted for 2.0 pps of real GDP growth, while raw population growth contributed 2.8 pps. In sharp contrast, labour productivity per hour worked contributed a modest and highly volatile average of only 1.6 pps.

Because Malta’s labour force participation rate (82.6%) now significantly exceeds the EU average (75.7%), the historical cushion of activating underrepresented demographics has largely been exhausted. To sustain a baseline growth rate of roughly 4.0% under the current structural model, Malta would require an unsustainable net influx of 14,000 new workers every year . To avert the resulting capacity constraints, the Council outlines two explicit, binding recommendations.

Recommendation No. 1: Transitioning to Productivity-Led Growth. Malta must break its structural dependence on demographic expansion. In several high-growth periods (including 2016, 2018, and 2019), labour productivity growth actually turned negative, proving that economic expansion was achieved by adding raw hours rather than generating efficiency gains. The Council emphasizes that future policy must pivot entirely toward maximizing output per hour worked. This requires a comprehensive strategy across education and training to resolve deep skills mismatches in the local economy. It also requires targeted labour market strategies that encourage job mobility away from low-margin, labour-intensive activities and toward high-value-added sectors.

Recommendation No. 2: Scaling Up Productive Investment & Capital Intensity. A primary driver of labour productivity is capital intensity—the volume of advanced technology, equipment, and modern infrastructure backing each worker. Malta’s aggregate capital intensity remains low relative to peer EU economies, limiting its capacity for structural efficiency. The Council advises a clear reallocation of capital away from short-term consumption expenditure and into productive investment. While Malta performs well in software and database acquisition, its domestic investment in Research and Development (R&D) is critically low, standing at an investment-to-GDP ratio of just 0.3% . Policy efforts must prioritise :

• Broadening fiscal incentives, such as accelerated tax depreciation and investment tax credits, to support the rapid adoption of digital technologies, automation, and cybersecurity.
• Encouraging the private sector to leverage advanced AI-related technologies to optimize production and service delivery streams.
•  Mobilising public capital to execute the ‘twin transitions’ of deep economy-wide digitalization and environmental sustainability.
• Optimising the quality and composition of public expenditure to crowd-in high-value private investment, thereby easing structural bottlenecks without generating fiscal waste.

The Malta Fiscal Advisory Council’s 2026 assessment confirms that while the nation’s immediate economic momentum is secure, its long-term resilience cannot rely on population growth. Transitioning from factor accumulation to a high-efficiency, capital-intensive economy is no longer optional; it is a structural necessity. By channeling public and private capital into R&D, structural digitalization, and targeted human capital development, Malta can protect its competitive edge, preserve its fiscal sustainability, and build a highly resilient economy capable of thriving through future global shocks.

The post The needed paradigm shift first appeared on The Malta Business Weekly.

As oil trading resumed after a brief pause in fighting, the price of Brent crude, the global benchmark, reached nearly $120 a barrel. It is up by 42% since hostilities began. The Iranian regime, despite more than 120 days of being bombed and blockaded by the world’s top military superpower and its Israeli ally, is emboldened.

Claiming that talks with Iran had been “brought to the highest level of Iranian leadership and approved,” Trump said he had “cancelled the planned strikes and bombings against Iran last week.” In response to the US strikes, Iran’s Islamic Revolutionary Guard Corps struck US targets on bases in Kuwait and Bahrain and hit and partially destroyed Sheikh Isa Air Base. Nothing is stopping the Iranian state from retaliating against its Western invaders.

Only recently, Iranian media said the army had conducted drone strikes targeting communications antennas and radar facilities belonging to the US Fifth Fleet in Bahrain. Add to this a recent air raid alert issued in Bahrain, where residents were urged to head to the nearest safe place. Notice how Kuwait temporarily closed its airspace as its military said its air defence systems were working to intercept hostile aerial targets.

In response to the US strikes, Iran partially destroyed Sheikh Isa Air Base. Readers may ask: what was the effect of the effective closure or minimal traffic in the Strait of Hormuz since early 2026? The short answer is that it has forced production curtailments and highlighted vulnerabilities.

Yet, the flow of oil out of the Gulf needs alternate routes, so many attempts are underway to dig and lay new delivery pipelines that circumvent the export of crude through the Strait of Hormuz. One such project, code-named ADNOC, was approved in mid-May 2026 by Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed. This is not a walk in the park, since construction in a tense region carries security and logistical risks, though parallel routing leverages existing rights-of-way for faster build times.

Long-term, this re-routing of crude encourages diversification but does not fully eliminate global market expectations. One cannot omit mentioning Saudi Arabia’s East-West Pipeline (Petroline). This is a mature, high-capacity bypass system that has been rapidly ramped up and proven resilient during the 2026 Hormuz disruptions, contrasting with the UAE’s ongoing expansion of its smaller-scale Fujairah route.

Saudi Arabia’s system is much larger (7 mb/d versus the UAE’s current 1.5–1.8 mb/d, growing to a future 3.6 mb/d). Naturally, this reflects Saudi Arabia’s vastly higher production base. It provides immediate, battle-tested relief. Together, both pipelines, when fully operational, mitigate but do not fully replace Hormuz volumes (about 20 mb/d pre-crisis). Saudi Arabia benefits more from short-term export continuity, yet the UAE’s expansion aligns with its capacity ambitions.

These efforts build on existing infrastructure but have been accelerated due to the ongoing Strait of Hormuz disruptions. Pressure is mounting on Trump to solve the dispute, particularly from American motorists now paying over $5.10 for a gallon of petrol on average.

Let us look for an alternative crude supply away from the troublesome Gulf area. Can the eastern and central Mediterranean basin prove to be an alternative source? The answer is not in the next decade. In fact, there is a low and declining share of oil produced from the central Mediterranean area (offshore around Sicily and the Sicily Channel). This represents a relatively small part of overall crude-oil output.

Most of Italy’s domestic oil production in recent years has been onshore (notably Basilicata – e.g., Tempa Rossa) and in the Adriatic Sea. One can deduce that the central Mediterranean offshore plays a minor role by volume compared with Gulf areas. Eni is the major Italian player in offshore hydrocarbon activity, including exploration and production around Sicily. Other companies and operators may hold smaller stakes or operate onshore and in the Adriatic; however, Italy is a substantial net importer of crude and petroleum products.

There has been ongoing exploration interest, including licence rounds and seismic surveys such as those in Malta, in the central Mediterranean. However, successful large oil discoveries and subsequent high-volume production in the central Mediterranean have been limited. Much of the recent investment has focused on gas rather than crude extraction. Regulatory sensitivities and public opposition surrounding offshore drilling – particularly concerning coastal tourism, fisheries, and environmental concerns – limit easy expansion in nearshore zones.

Back to the fragile situation of crude deliveries out of Hormuz, one expects that a short-term solution is to bypass it via pipeline installations, yet this takes time. In a post-resolution scenario, these would complement the reopening of the Strait by providing redundant and secure export routes.

In summary, can we conclude that oil riches have once again spurred a second turbulent Gulf war?

The post Oil again is the cause of global turbulence first appeared on The Malta Business Weekly.

Buoyed by a summer schedule featuring more than 110 destinations, including three new routes inaugurated last month, this momentum continued into May as Malta International Airport welcomed 1.08 million passengers, MIA said. 

Additional flights contributed to an increase of 18.6 per cent in seat capacity. Despite this double-digit growth, a robust seat load factor (SLF) of 83.5 per cent was recorded, showing a strong appetite for travel to the Maltese Islands. This reflects a wider trend identified by the European Travel Commission, which found that southern European and Mediterranean destinations were Europeans’ preferred choice for summer travel this year. The most popular markets remained largely unchanged from previous months, with the United Kingdom topping the leader board with a market share of 21.3 per cent. Italy, Poland, Germany, and France rounded out the top five markets, recording growth rates that ranged between 8.0 per cent and 62.5 per cent.

The post MIA among Europe’s strongest performers in April first appeared on The Malta Business Weekly.