Malta’s Growth-at-Risk: Exploring the Effects of Macro-Financial Factors on Growth

This paper employs a Growth-at-Risk (GaR) framework to assess the impact of macro-financial variables on the growth rate distribution of Malta over a one-to-two-year horizon. The analysis suggests that while the baseline outlook is positive, large tail risks are associated with the domestic risk factors related to residential housing prices and household credit. Conversely, external factors from the Euro Area are likely to have a smaller direct impact on the growth rate distribution, transmitted through financial conditions in the bloc.