Malta’s economy is forecast to continue to gain momentum this year and is expected to register the second highest growth among the 17 members of the eurozone, according to the EU’s winter economic forecasts published this morning.

According to the report, compiled by the Commission’s economic services, Malta’s GDP growth this year is expected to reach 1.5 per cent, the second highest after Estonia’s 3 per cent.

On the other hand, the Commission is forecasting a contraction of -0.3 per cent in the euro area’s GDP growth.

According to the Commission, Malta’s economy, which it described as “gradually gaining pace”, will result in above average job creation (+1.7 per cent compared to -0.8 in the eurozone) and low unemployment (6.4 per cent against 12.2 in the euro area).

With regards to public finances, the Commission is forecasting a deficit of -2.9 per cent, up from -2.6 per cent forecast for 2012, and an increase in public debt to 73.9 per cent of GDP, up from 73.1 in 2012.

The figures are all based on forecasts as the actual data for 2012 has yet to be published by Eurostat, next month.

According to the budget estimates, the government is expecting more positive results with regards to the deficit, which is estimated to fall to 2.3 per cent for 2012.

The Commission said that domestic demand is expected to become the main driver of Malta’s economic growth in 2013-2014 and construction investment is forecast to pick up slightly on the back of EU funded projects.