Demarco urges skills and technology investment as Malta faces ageing
Malta must raise skills and invest in technology to sustain growth as its population ages, Central Bank of Malta Governor Alexander Demarco said in Valletta on October 5, 2026. Real GDP per capita rose seventeenfold between 1960 and 2025.
From departures to labor demand
Nearly 90,000 Maltese emigrated between 1948 and 1967, about a third of the population, as employment tied to Britain's military base declined.
After independence in 1964, Malta developed alternative industries and export-oriented services.
Real GDP per capita rose from just over €2,000 in 1960 to just under €35,000 in 2025.
Foreign citizens accounted for nearly 30 percent of residents in 2025, against less than 2 percent in 1995.
Demarco said migration supports a renewed demographic dividend despite a birth rate around 1.0. Computer programming, professional services, administrative support, remote gaming and financial services generated over half the increase in value added since European Union accession.
Childcare and pensions expand employment
Four reforms expanded labor supply: free childcare, pension deferral incentives, benefit tapering and in-work benefits.
Childcare began in 2014 for children aged three months to three years whose parents work or study.
The parental employment gap in one-child families fell from 33.4 percentage points in 2013 to 15.4 in 2025.
Pension deferral offers a lifetime top-up of up to 29 percent; early retirement at 61 fell from 25 percent in 2016 to 15 percent a decade later.
Benefit tapering preserves declining entitlements for three years after employment starts.
Productivity over labor expansion
Demarco argued that congestion and ageing require growth incentives to favor skills and advanced technology rather than greater labor input.
He called for flexible employment, older-worker training and a holistic migration policy.
Finance must channel savings into digital and green investment, he said.
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