Since the UK referendum vote in June 2016 to leave the EU, the impact on Malta has been a much-debated topic. With London-based corporations reportedly working out relocation plans to the island, the most common view has been that Brexit will affect Malta positively. A new report by KPMG UK, authored by Chief Economist Yael Selfin and Principal Economist Dan Aylward, now suggests the opposite. The economists argue that Malta – along with Ireland, Cyprus and Luxembourg – will be one of the biggest losers of a Brexit settlement with the EU.
The report states that the UK is a very important export market for Malta, with UK-exports as a share of Malta’s GDP standing at 9.1%. When it comes to the export of services to the UK, the figure stands at 6.4% of Malta’s GDP, while Maltese imports of services as share of the UK GDP stands at 0.1%. This suggests that Malta has comparably more to lose from trade barriers than the UK.
There are also as much as 7.6% of Maltese citizens living in the UK, and KPMG states that Malta relies on British workers. Malta ranks comparably high in all areas of analysis of potential Brexit impact, including the impact on goods and services exports, and the impact on Maltese citizens living in the UK. The exception is the number of UK citizens living in Malta where the impact is assessed as medium. The analysis does not distinguish between members of The Commonwealth and EU members.
Source: KPMG UK