As from the 1st January 2008, Malta has joined the Euro zone at the fixed rate of 0.4293.

The following convergence criteria were all adhered: a. Long-term interest rates; these are to be within 2% of the average rates in the three countries with lowest inflation rates; b. Price Stability / Inflation; these are to be within 1.5% of the best three performing EU countries (not restricted to those already in the Euro area) in terms of price stability. Malta’s estimated inflation rate as at March 2007 is 0.3% below the established threshold. c. Government Deficit, within 3% of GDP; see (iii) below; d. Public Debt, below 60% of GDP; see (iv) below e. Exchange Rate Stability; observance of the normal margins of the exchange rate mechanism without severe tensions or devaluation for two years. So far there are 15 countries who have introduced the Euro, the last countries to join being Slovenia in 2007 and Malta and Cyprus in 2008. Latvia failed the entry test in 2005. Interest Rates. Interest rates are now fully aligned to the Euro, with the current base rate being 4%. Government Budget Deficit. The government budget deficit for year 2006 is forecasted at less than 3% of the Gross Domestic Product. Public Debt. The Public Debt at the end of 2005 stood at 77% of the GDP and at 68% at end 2006. This is expected to go gradually fall to 60% by the end of 2009. The test need not be satisfied upon entry, as long as there is evidence that the debt as a share of GDP is declining. Exchange Control. There are no Exchange Control restrictions. The Exchange Control Act has been replaced by the External Transactions Act (Chapter 233 of the Laws of Malta). It empowers the Government to introduce special monetary measures in case of emergencies only. The only current remaining restrictions refer to the issue, purchase and sale of securities not listed on the Malta Stock Exchange in Maltese companies by or to persons outside the European Union which still have to be approved by the Malta Financial Services Authority; in addition this latter restriction does not apply to “foreign income account” companies, international trading companies and shipping companies. There are no foreign exchange difficulties, and despite the fact that Malta has no natural resources of its own and has to import all the raw materials and a large proportion of its foodstuffs, producer and consumer goods requirements, Malta's foreign currency reserves as a factor of its import bill (import cover) are very strong. Cash Movements upon entering or leaving Maltese ports or airports. Legal Notice 463/2004 prescribes that travellers who have more than the equivalent of Lm5,000 on their person must declare their cash to the Comptroller of Customs; defaulters risk confiscation and being accused of a criminal offence. Economic Growth. The rate of economic growth in Malta is good with the increase in Gross Domestic Product over the last two decades at times in the double digit figure, although recent increases have been very modest. In 2004, the increase was 3.2% at current prices and 1.5% in real terms. The real increase in GDP in 2005 was 0.9% and this is forecast to increase 1.1% and 1.2% in 2006 and 2007. Foreign Direct Investment. Malta’s foreign direct investment (FDI) per capita is ranked 6th among EU member states. Social Equality. There are no marked inequalities of income and this, coupled with a modern social services set-up, has eradicated poverty. Primary, Secondary & Tertiary Industries. Agriculture, manufacturing industry, ship building and ship repair continue to be important, but with the passage of time the service industries, including tourism and financial services, are becoming increasingly important. The value of Malta’s exports on a per capita basis are classified in the 11th position among EU member states (2005). Tourist arrivals have exceeded the 1 million mark and a vast range of hotels, including a good number of 5-star business hotels, can be found. Balance of Payments. The current account of the balance of payments registered a deficit of Lm140 million during 2005, representing a deficit on the merchandise account (balance of trade) that is partly set off against a surplus in the services account. Type of Mixed Economy. The economy is patterned on a mixed system. The state has minimal participation in industry or in commerce, but is still active in the energy and water services utility sector. The government continues to shed its holdings in business entities through a privatisation process. Inflation. The inflation rate for the 12-month period to December 2004 was 2.79%. Unemployment and Labour Supply. The rate of unemployment as per National Statistics Office in March 2005 was 5.5% of the labour supply and increased to 7.5% in July 2005 as per NSO. In the Budget speech of the 31st October 2005, the Prime Minister announced a “decrease” to 4.5% of labour supply at the end of September 2005. The Labour Supply of gainfully occupied persons is about 145,000 which when added to the registered unemployed of circa 12,000 gives a labour supply of 157,000.