Latest Central Bank projections show that economic growth in 2017 and next year will slow down when compared to the last three years but will still remain about 4 per cent.

Details on the economic outlook were on the agenda of a business breakfast held this morning in which the top Central Bank officials discussed the recently published 2016 Central Bank annual report.

In its short term projections, the bank said that domestic demand is set to remain the major growth contributor, reflecting low unemployment rates and a pick-up in wages. Net exports are also expected to contribute strongly mainly through services exports.

On the other hand the Central Bank is warning that labour shortages could be a constraint for economic growth.

In the longer term, between 2021 and 2025, it is expected that Malta's potential growth will stabilize at around 3.25 per cent, which is nevertheless above the country's historical growth rate.Medium-term outlook is brighter when compared to that of the Euro Area. Furthermore, this positive outlook will contribute to further the sustainability of public debt and current account performance, the Central Bank is forecasting. 

In its 2016 review, the report highlights the financial turnaround of government's finances, starting from a 1.3 per deficit in 2015, to a 1 per cent surplus.

Government debt-GDP ratio declined by 0.6 per cent to 59.7 per cent thus falling within the Maastricht criterion for the very first time.