Macroeconomic Policy Frameworks of Small States

A Case Study of Malta

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Malta’s socio-economic successes have been remarkable. Key policy decisions have enabled this small island state to cope with its inherent vulnerabilities. This book reviews the implementation of macroeconomic policies in Malta, identifying the key issues, lessons learnt and best practices which could be adapted by other small states. It also sets out the country’s challenges for the future, which include managing a huge fiscal deficit, a high unemployment rate and attending to the conflicting demands of environmental conservation and economic development.




The geographical location of Malta at the heart of the Mediterranean has given the island a natural strategic advantage as a major trading centre. This has contributed significantly towards Malta’s strong economic position. Today, Malta plays a key role in the region, as a strategic hub for trade, services and manufacturing. This has been possible thanks to the well-established public-private partnership. While the private sector provides the necessary entrepreneurial element and skills to drive the enterprise, the government ensures the enabling climate for business to prosper. Besides, the country’s liberal trade policies have given the private sector a pre-eminent role in the economy.


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