Do voters care about the cost of living?

Survey respondents ranked price pressures among the top five concerns across the years and different surveys. The exact questions were not directly comparable, but a general trend is clear: whether it is cost of living, food prices, or inflation, people are deeply concerned.

In a 2022 survey of youth, respondents were asked how expensive it is to live in Malta. Millennials’ average score was 4.32 out of 5, and Gen Z’s was 4.15. Inflation was a concern for over half of Gen Z and over 40% of millennials.

Yet when the Times of Malta asked its website users how they were personally responding to the price shock in 2023, nearly one in five said they were doing nothing.

A Growing Economy And A Growing Debt

Those concerns sit against a backdrop of strong economic growth. The European Commission’s spring forecast projects Malta’s economy to grow by 3.7% this year, the highest rate in the EU.

“The expansion is driven by robust domestic consumption and a thriving tourism sector, and is projected to moderate to 3.7% in 2026 and 3.6% in 2027 as external economic conditions become less favourable,” it reads.

Growth, however, comes alongside a deficit: meaning the government spends more than it earns. Measured against GDP, that deficit has narrowed steadily to 2.2% of GDP in 2025 and is forecasted to remain below the EU’s 3% threshold.

Budget documents show Malta ran a deficit of €995 million in 2025 (above the expected €849 million), and is projected to be €852 million in 2026. At the end of March 2026, central government debt totalled €11.4 billion, €621.8 million higher than a year earlier. The debt-to-GDP ratio is expected to stabilise at around 46%.

Looking ahead, several pressures could trigger significant shocks. Malta’s economy leans heavily on labour migration and tourism, with the strains those bring; key sectors such as gaming are exposed to regulatory change; and the energy fuel subsidy is set to end.

How is the public sector cushioning the shocks?

Food continues to drive the retail price index in Malta, which tracks the price changes of key products over time. Housing also adds to inflation, but mainly in maintenance costs. 

The prices of water, electricity, gas and fuels are steady. However, the government intervenes in all of those sectors, notably with its Energy Support Measures – subsidies designed to shield households and businesses from rising global energy prices. These are projected at €172 million for 2026, bringing the total to €968 million by the end of the year.

As of February (latest data), the annual inflation rate was:

• 2.9% on food (excluding restaurants and takeaways),
• 2.3% on rent;
• 5.1% on house maintenance services;
• 1.6% on transport;
• 2.1% on pet supplies and services;
• 5.7% on restaurants and takeaways;
• 5.1% on furniture and furnishings.

Energy, water and fuels

Housing, water, electricity, gas and fuels account for 10% of the average household’s total spending, rising to 13% for low-income households.

Since 2022, the government has subsidised energy and fuel. EU institutions have criticised this policy for failing to protect vulnerable households or nudge people towards sustainable shifts. 

In addition to general subsidies, the government pays an energy benefit to residents earning less than €14,993 a year. The government subsidises the installation of water filters at homes, and socially vulnerable households can get help replacing inefficient appliances.

Still, Eurostat shows that nearly 8% of Malta’s residents were unable to keep their homes adequately warm when needed, below the EU average but more than in colder countries like Finland and Estonia. 

Food

A study by the Economic Policy Department found that the average household dedicated a quarter of its total expenditure to food and beverages, rising to almost 30% in low-income households.

In 2024, the government reached an agreement with importers to freeze wholesale prices of 400 goods prone to inflation. These are the products the government is subsidising:

                      The processing classification is based on the NOVA system

That year, about every tenth resident could not afford a meal with a source of protein, such as meat or fish, every other day – a share similar to that in France and Italy.

Housing

The Housing Authority runs a range of schemes to subsidise housing costs, including support for first-time buyers, loan subsidies, and assistance for social housing tenants, regular tenants and landlords, among others. 

Over the past decade, house prices in Malta have risen faster than the EU average; faster than in Italy and Cyprus, though more slowly than in Czechia, Hungary or Poland.. In 2024, 70% owned the home they lived in. Tenants, meanwhile, experienced steep rent increases since the pandemic, with rents about 1.5 times higher in 2024 than in 2015. 

The Maltese lived in the largest houses in the EU, with 2.2 rooms per person, more space than people in richer countries like the Netherlands and Luxembourg. 

Less than 4% lived in an overcrowded home; this is much lower than the EU average, and the share of people living in under-occupied homes (too large for the household size) was among the highest, at nearly two-thirds. This shows that some of Malta’s housing problems stem from inadequate design.

Transport

There are other subsidies for daily essentials, such as free school buses and free public transport for all residents of Malta. The latter scheme is financed through the EU’s Recovery and Resilience Facility, and it is unclear what will happen after its closure at the end of this year.

Despite promises to tackle traffic congestion, cost-of-living subsidies effectively support reliance on private cars. The fuel subsidy supports private internal combustion car owners, while the electricity subsidy supports electric car owners. Grants encourage drivers to purchase electric cars.

How much do households need to survive?

An analysis by the Economic Policy Department maps out the thresholds. Households with disposable income above €3,000 a month can already put something aside; the median in this group saves €163 a month. Those with a disposable income of €8,494 or more per month save a substantial share, with a median savings rate of 43%.

The study found that “couples with two children require a monthly income in excess of €3,700 per month to cover their monthly expenditure”. 

Median households of three or more adults without children had the highest savings rate, but median elderly couples, single parents, two adults with children, and two adults with at least one elderly person but without children had negative savings, meaning they were spending more than they were receiving. 

Low-income households spend more than they make, which may indicate reliance on credit, past savings, intergenerational support, or undeclared income. On the contrary, high-income households spend less than 60% of their income and keep the rest.

What to watch for

The two major parties are trying to outdo each other, promising cash benefits and tax cuts. But voters are increasingly asking how the government will pay for this without raising taxes. Malta’s GDP growth will lead to lower EU co-financing for infrastructure and similar projects in the future 

During the pandemic, Malta has tested a highly successful voucher scheme, encouraging residents to spend on local businesses. On the contrary, cash benefits may or may not stimulate the Maltese economy. Are all candidates convinced that this is the best use of taxpayer money?

The current subsidy structure supports people’s habits, such as car use, fossil fuel dependency, and ultra-processed food consumption. Is the election season the right time to debate whether it’s time to nudge people towards healthier choices?