Rising Expenses & Government Support Explained

In 2024-25, Malta faces rising living costs, particularly in housing, energy, and groceries. The government has responded with subsidies, pension increases, and tax relief to help mitigate these pressures. Despite the challenges, Malta remains an appealing option for expats compared to Northern Europe.

Malta, a Mediterranean gem known for its sunny climate and cultural heritage, has seen a significant rise in the cost of living over the past few years. As we move through 2024 and into 2025, both residents and expats are feeling the pressure of inflation, with prices increasing in key areas such as housing, groceries, and utilities. This article will explore how rising costs have impacted Maltese citizens and the government measures aimed at alleviating some of these pressures. It will also provide practical tips for managing these changes.

Key Areas Impacted by the Rising Cost of Living

1. Housing Affordability One of the most prominent challenges in Malta is the soaring cost of housing, particularly in urban areas. The demand for housing has surged due to a growing population and an influx of expatriates. This demand has led to steep increases in both rental prices and property values, making it difficult for many Maltese citizens to find affordable housing.A report by NSO Malta in 2023 revealed that housing costs had increased by around 5% annually since 2020, with a particular spike in the central regions. Many locals now find themselves priced out of their own communities. To mitigate this, the government has introduced schemes such as first-time buyer incentives and rent subsidies .Government Support: You can find more information on housing schemes and assistance on the Malta Housing Authority website.
2. Energy and Fuel Costs Energy prices are another area where Maltese residents have felt a pinch. Malta, which relies heavily on imported energy, has faced rising electricity and fuel costs due to global inflationary pressures. However, the government has intervened to ease these burdens through subsidies and price controls.For instance, in the 2024 budget, the government announced continued subsidies for energy prices to shield households from the full impact of these international price rises . This has helped to stabilise electricity bills for many, though fuel costs for transportation have still seen moderate increases.Government Support: More details on energy subsidies and fuel price adjustments can be found on the Ministry for Energy website.
3. Groceries and Food Prices Groceries, particularly fresh produce, have become more expensive over the past year. Malta’s reliance on imported goods means that global supply chain disruptions and inflation have trickled down to local supermarkets. Basic staples such as bread, dairy, and meat have seen price increases of between 8% to 12%, according to Eurostat . This has placed a strain on households, especially those with fixed incomes.Government Support: The government has rolled out targeted subsidies for vulnerable families, offering vouchers and financial aid to help cover food expenses. You can find more details about food assistance programmes on the Social Security Department’s website.

Government Measures to Support Citizens

Despite these rising costs, the Maltese government has implemented various initiatives to alleviate financial pressures on its citizens:

1. Pension Increases: In the 2024 budget, the Maltese government introduced a significant increase in pensions, aimed at supporting the elderly population, who are particularly vulnerable to the rising cost of living. The pension boost is designed to help retirees manage higher grocery, housing, and utility expenses .
2. Tax Relief: For working individuals, the government has introduced tax breaks and income tax rebates to help offset the increased cost of living. These measures aim to provide relief for middle-income earners, who are often the hardest hit by inflationary pressures .
3. Business Support: Small and medium enterprises (SMEs) have also received support, particularly in the form of energy subsidies and grants to help them manage rising operational costs. This support ensures that businesses can continue to operate without passing all cost increases directly onto consumers .Government Support: For more information on business grants and subsidies, visit Malta Enterprise.

Affordability for Expats

Despite these challenges, Malta remains an attractive destination for expats, particularly those coming from Northern Europe. While the cost of living has risen, it is still relatively affordable compared to countries like the UK, Germany, and Scandinavia. Expats are drawn to Malta for its favourable tax regime, warm climate, and English-speaking environment.

However, expats should be aware of the rising cost of housing and groceries, which can significantly impact their monthly budget. Planning for these increases is essential, especially for those on fixed or limited incomes.

Practical Tips to Survive the Rising Cost of Living

For those living in Malta or considering moving there, here are some practical ways to manage the increased cost of living:

1. Budget Wisely: Given the rise in housing and grocery costs, it’s important to create a realistic monthly budget. Identify areas where you can cut costs, such as by reducing energy consumption or shopping at discount supermarkets.
2. Explore Government Schemes: As mentioned above, there are several government support schemes available, particularly for housing and utility costs. Be sure to explore these options and apply if you’re eligible.
3. Consider Suburbs: If housing costs in central areas like Valletta and Sliema are too high, consider living in suburban or rural areas where rent prices may be lower. Public transport and telecommuting options make commuting more feasible.
4. Energy Efficiency: With energy prices rising, it’s wise to invest in energy-efficient appliances and adopt habits that reduce electricity consumption, such as turning off lights and using energy-saving bulbs.

final thoughts…

The cost of living in Malta in 2024-25 is undoubtedly rising, driven by higher housing, energy, and food prices. While this presents challenges for both locals and expats, the Maltese government has implemented various measures to ease financial burdens. By staying informed about available support and adopting smart budgeting strategies, residents can better navigate these changes while continuing to enjoy the high quality of life Malta has to offer.