Sources: NSO, KPMG Analysis
AI spotlight
1. AI will increase demand for “human” skills1
These include professional judgement, critical thinking and other skills which complement AI generated material.1
2. Efficiency
- AI adoption increases labour productivity by 4%.2
- A key finding of the KPMG European Outlook is that 37% of European firms already use AI - on par with the US.3
3. Job automation
One argument is that automation of specific tasks leads to reallocation of labour, not replacement. This has been observed with the adoption of robots in industry to automate manual labour.4
4. Job losses
26% of Chief economists expect significant job losses within the next decade globally.5 This could be due to automation reducing the number of workers needed for certain jobs.
5. Job creation
On the other hand, there is an expectation of job creation in occupations that did not exist prior to AI becoming publicly available.6 This may offset job losses in industries where automation reduces labour demand.
6. AI can create inequality
Medium and large firms tend to invest more in AI than smaller firms and subsequently exhibit stronger gains from AI implementation than smaller ones.7
GDP and GVA
These areas have shown the largest increase in output (GVA) since Q4 2024:
Inflation
Sources: NSO, Oxford Economics
Interest rates
In Malta, the effects of the ECB’s rate adjustments remain limited, as local banks fund loans using deposits, and do not rely heavily on borrowing.
Sources: ECB, Bank of England, Fed, KPMG
Property: Permits issued
Commercial and residential permits increased by 21% and 54% respectively in Q4 2025 from Q4 2024. 71.8% of approved dwellings were apartments, followed by penthouses (15.8%) and Maisonettes (8.3%).
Sources: NSO, Central Bank of Malta, KPMG Analysis
Property prices
In 2025 Q4, transacted apartment and maisonette prices increased by 6.2% and 5.3% respectively since 2024 Q4. Overall, transacted prices have risen by 27% and advertised prices have risen by 22% since 2022 Q1.
Sources: NSO, Central Bank of Malta, KPMG Analysis
Sources
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1. Forbes: “AI Is Eliminating Jobs. So Why Is A Labor Shortage Looming?"
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2. European Investment Bank: “AI adoption, productivity and employment evidence from European firms” p.5
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3. KPMG: “KPMG European Outlook”
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4. European Commission: “Work in the Digital Era: How Technology is Transforming Work and Occupations” pp .19-21
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5. World Economic Forum: “Chief Economists' Outlook: January 2026” pp. 21-25
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6. Ibid
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7. European Investment Bank: “AI adoption, productivity and employment evidence from European firms” pp.7-8
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