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Network News • 30-01-2024

The Informal Economy as portrayed in Malta’s NRA 2023

The National Coordinating Committee on Combating Money Laundering and Funding of Terrorism (NCC) has recently published Malta’s National Risk Assessment for 2023 (NRA). This assessment portrays an analysis on issues Malta faces with respect to threats and vulnerabilities coming from money laundering, terrorist financing together with, for the first time, proliferation financing and targeted financial sanction risks.

The concept of the Informal Economy comes about in Malta’s NRA for 2023 as being one out of three contextual factors that could greatly impact the efficacy of Malta’s AML/CFT measures: with the other two contextual factors being ‘legislative & institutional’ and ‘Size and materiality of the economy’.

To explore the Maltese Informal economy, Malta’s NRA for 2023 refers to a study published in 2020 by the Central Bank of Malta; ‘An Analysis of the Shadow Economy in Malta’. The Central Bank of Malta study utilised the Currency Demand Approach (CDA) and Multiple Indicators Multiple Causes (MIMIC) to measure the shadow market. The analysis conducted by the Central Bank of Malta concluded that the size of the Maltese shadow economy had been quite stable between 2008 and 2018, in which a slight downward trend can be seen through the MIMIC measure. This reduction in the informal economy was then again seen via the wage supplement measure, which was adopted during COVID-19, as businesses and self-employed which relied on the tourism industry were given a wage supplement to incentivise the company and its employees to be a part of the formal economy.  In the study, the Central Bank of Malta outlined that although there was a decrease in employment growth from 2019 to 2020, there was a simultaneous decrease in growth in GDP. This study suggests that there was in fact a transfer from the informal economy to the formal economy. The NCC outlined that this correlation is not apparent in 2021, thus might entail that the informal economy was rebooting to its pre wage supplement level. 

The NCC concluded that given this Central Bank of Malta study, Malta possesses an informal economy, characterized by a declining trend, which holds significance to AML/CFT risks.


More information here.


Should you require further information in relation to this assessment, please contact Krista Galea on


Please note that this article is being published solely for informational purposes. It is imperative to note that this content neither constitutes nor should be inferred as legal advice or guidance. PKF Malta Limited explicitly disclaims any responsibility or liability for potential damages that may arise from the utilisation of this information as a substitute for professional legal advice or guidance.

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