Issue link: https://maltatoday.uberflip.com/i/1541360
ECONOMIST JP Fabri argues that Malta has reached a pivotal moment in its economic trajectory, warning that the country must move beyond short-term fixes and begin a deeper economic "renewal" to remain com- petitive and resilient. The country's high growth, low unemployment and rising incomes masks structural weaknesses that cannot be ignored, he tells me when I sit down with him a fortnight after Budget 2026 was delivered. Fabri says the budget continues a government trend of prioritising social stability and domestic con- sumption; a strategy that worked during years of external shocks but is now limiting Malta's econom- ic evolution. Consumption-driven growth, he notes, has buoyed GDP figures but contributed to pressures on infrastructure, labour supply, mobility, and quality of life. "We are at a crossroads," he says. "The next phase must be value-driven, not vol- ume-driven." Central to this shift is the need for higher productivity, which he sees as the only sustainable path to im- proved living standards. Fabri calls for a move away from chasing new economic "fads" and instead upgrad- ing and sophisticating sectors where Malta has already shown long-term strength, such as asset registration, advanced manufacturing and the creative industries. But such an economic transition cannot happen without bold re- forms, and he warns that Malta's policy debate has been hijacked by short-termism. He cites transport as a sector where political reluctance to introduce behavioural nudges, including taxes and disincentives for private car use, has prevented meaningful progress. "Unless pri- vate transport becomes significantly more expensive, mass transit will not take off," he argues. Fabri also emphasises demograph- ic challenges, noting Malta's reliance on foreign labour is not a matter of choice but necessity, given ageing, fertility and pipeline issues in sever- al essential professions. Long-term solutions, he says, must span dec- ades, not election cycles. Education reform, too, is urgent. Fabri calls for a system centred on creativity, critical thinking and inclu- sivity, along with a revitalised voca- tional training sector. Without such reforms, Malta risks falling behind in preparing students for a rapidly changing technological landscape. With rising public spending and debt, he urges a shift toward as- sessing government performance through quality, not quantity. Ulti- mately, Fabri says, Malta's resilience will depend on its readiness for fu- ture shocks: "We need the courage to take difficult decisions today to prepare for tomorrow." 4 maltatoday | SUNDAY • 16 NOVEMBER 2025 INTERVIEW JP Fabri: 'We need courage to take difficult decisions today to prepare for tomorrow' Economist JP Fabri warns that Malta's growth model is reaching its limits, arguing that Budget 2026 must be understood within a bigger shift towards long-term resilience, higher productivity, and a more holistic national strategy that goes beyond short-term fixes. He speaks to Nicole Meilak