Preliminary results released by Malta’s Electoral Commission showed Labour securing 52% of the vote, ahead of the opposition Nationalist Party (PN) on 45%, confirming the party’s continued dominance of the Mediterranean island nation’s political landscape.

Abela, 48, sought a fresh mandate a year before the scheduled election, arguing that Malta needed political stability to navigate potential economic fallout from tensions in the Middle East. The island’s economy expanded by 4.0% last year, but policymakers have expressed concern that higher aviation fuel costs could affect tourism, a key pillar of the economy, while also contributing to inflationary pressures.

Speaking to supporters gathered outside Labour headquarters, Abela hailed the result as a historic achievement for the party. Celebrations broke out across Malta, with supporters setting off fireworks and gathering in the streets after preliminary results confirmed Labour’s victory.

The election pitted Abela against Nationalist Party leader Alex Borg, a 30-year-old lawyer who campaigned on a platform of political change. Despite the opposition’s efforts, economic stability remained the dominant issue during the campaign.

Abela has led Malta since 2020, when he succeeded his predecessor following a political crisis linked to the 2017 assassination of investigative journalist Daphne Caruana Galizia. Concerns over governance and corruption persisted in the background of the campaign, with a 2025 Council of Europe report stating that Malta remained significantly behind in tackling corruption, although the issue featured less prominently in the election debate.

Malta, the European Union’s smallest member state, has experienced rapid economic growth driven by tourism, financial services and online gaming. The country has also undergone a sharp population increase over the past decade, largely due to immigration, fueling construction activity while placing pressure on infrastructure and public services.

The island remains heavily dependent on imports and vulnerable to external economic shocks. Labour has pledged to maintain subsidies on household energy bills, a policy that has helped shield consumers from higher energy costs.

Environmental groups have raised concerns about extensive development and its impact on heritage sites and natural resources, while climate-related risks including drought and desertification received limited attention from the major parties during the campaign.

In an interview, Banga said the World Bank expects global growth to decline by 0.3 to 0.4 percentage points under a baseline scenario assuming an early end to the conflict, and by as much as 1 percentage point if the war continues.

Inflation could rise by 200 to 300 basis points, with further increases of up to 0.9 percentage point in a prolonged conflict scenario.The bank now projects growth in emerging markets and developing economies at 3.65 percent in 2026, down from a previous estimate of 4 percent in October.

In a more severe scenario, growth could fall to as low as 2.6 percent. Inflation in these economies is forecast to reach 4.9 percent, compared to an earlier estimate of 3 percent, and could climb as high as 6.7 percent if disruptions persist.

The conflict has already driven oil prices up by about 50 percent while disrupting supplies of key commodities including oil, natural gas, fertilizers and helium, alongside impacts on tourism and air travel. Continued instability around the Strait of Hormuz remains a major risk factor, given its role in global energy flows.

Banga said the economic outlook depends heavily on whether ongoing negotiations lead to a lasting peace and the reopening of critical trade routes. Failure to stabilize the situation could result in longer-term damage to energy infrastructure and sustained pressure on global markets.

The World Bank has begun discussions with vulnerable countries, including small island states with limited energy resources, on accessing emergency funding through its crisis response mechanisms. These facilities allow governments to draw on pre-approved funds to manage immediate shocks without requiring new approvals.

At the same time, Banga cautioned governments against introducing unsustainable energy subsidies, warning such measures could worsen fiscal pressures in countries already burdened by high debt and elevated borrowing costs.

The crisis has intensified calls for energy diversification and greater self-sufficiency. Banga pointed to increased investments in refining capacity in countries such as Nigeria as an example of improving energy resilience, while noting ongoing World Bank support for expanding energy production in nations including Mozambique.

He added that scaling up nuclear, hydroelectric, geothermal, wind and solar energy would be critical to reducing reliance on traditional fuels and mitigating future shocks to global energy systems.