Malta's economy is expected to be the least affected by COVID-19 in Europe. The World Economic Outlook report published by the International Monetary Fund (IMF) on the effects of the crisis on the world's economy, projects that (in the best-case scenario of the pandemic decreasing during the second semester of this year) the country's economy will shrink by 2.8% this year, to rebound in 2021 with a 7% growth. Unemployment in Malta is expected to rise to 5% this year, to drop again to 4.4% in 2021.
The current account balance of payments, which is a record of Malta's international transactions with the rest of the world, is expected to fall from 8.4% of GDP in 2019 to 3.3% this year, before growing slightly again to 6.1% in 2021. According to the IMF's projections, Malta will, therefore, register the smallest economic contraction across all Europe. On average, European economies will be expected to shrink by 6.6%.
Globally, we will face the worst economic contractions since the 1930s Great Depression, and far worse than those which have been experienced in 2008, as the global economy is expected to shrink by 3% before rebounding to 5.8% growth in 2021. Italy and Spain, whose economies are projected to shrink by 9.1% and 8% respectively, might be the worst affected countries in economic terms.