Updated 1.20pm with government statement

While economic activity is expected to remain robust, real GDP growth is expected to decline over the next three years, according to the Central Bank.

Economic activity in Malta will remain supported by both demand and supply factors, according to the bank's macroeconomic forecasts.

In particular, the energy reforms that have taken place in recent years, new investment projects, increased labour market participation and robust services exports are the primary drivers supporting the economic expansion.

While real GDP growth is projected at 4.3% for 2016, it is then expected to decelerate to 4.1% in 2017, 3.7% in 2018, and 3.3% in 2019.

As a result, the labour market is projected to remain tight, with the unemployment rate falling further to 4.9% in 2016, before picking up slightly to 5.3% by 2019.

Downward international price pressures are expected to contribute towards a further easing of consumer price inflation this year.

Annual inflation should ease from 1.2% in 2015 to 0.9% in 2016. It is then projected to trend up to 1.9% by 2019, reflecting a pick-up in international commodity prices and domestic cost pressures.

In terms of public finances, restraint in key expenditure variables is expected to contribute towards a decline in the general government deficit, with government finances set to become broadly in balance by 2019.

In a statement later, the government said the CBM report reflects the way it reduced burdens on families and businesses, while providing incentives towards job creation. 

Thanks to the Budget measures, the government said it will continue working to ensure wealth is distributed among all.