Malta spent 0.7 per cent of its GDP on long-term care costs in 2010, and is forecasting an increase of 1.1 per cent between 2010 and 2060.

A report on the European economy by the European Economic Advisory Group and CESIFO, a Munich-based research institute, said the EU average in 2010 was 1.8 per cent, forecast to grow to 1.7 per cent.

The highest spending was in Denmark (4.5 per cent of GDP) and the lowest in Cyprus (0.2 per cent of GDP).

Cesifo said that there was generally the probability that an increasingly large sector of the elderly population would require long-term care, with the steepest rise anticipated in Scandinavian countries.

“That care can either be financed through the development of an insurance system featuring higher payments by current mid-generation individuals, or through the rigorous enforcement of a means-tested and means-based payment system, designed to mobilise the locked-in assets of the elderly,” it said.

The institute pointed out that most medical expenses occurred in the last years of life, with advances in medical technology and more expensive treatment options pushing up costs.