“I cannot but welcome with satisfaction the European Commission’s confirmation that Malta’s economic growth outlook is robust and that the country’s public finances are being placed on a sound footing.”

This was the message sent by the Minister for Finance Prof. Edward Scicluna who is in Brussels attending ECOFIN and Euro Group Meetings. The European Commission’s 2014 Spring Forecast was published today Monday 5th May, 2014.

In the Spring Forecast, the Commission recognises that economic activity in Malta “surprised positively in 2013” with a real GDP growth of 2.4%, attributing the growth to a pick-up in private consumption.

The Ministry for Finance also welcomes the Commission’s recognition that the Government is placing the country’s finances on a sound footing due primarily to strong economic growth, robust labour market conditions, responsible spending review, and resource-management efforts.

The Commission remarks that in 2014, the deficit is expected to further decline to 2.5% of GDP.

Furthermore, the Commission recognises the Government’s plans to reduce the debt as evidenced by its projection that the debt ratio is expected to decrease by some 2 percentage points over 2014-15, following the repayment of a loan from Air Malta and the partial clearance of some tax arrears from Enemalta.

The Commission further notes that “the reduction in utility tariffs is expected to have a beneficial impact on disposable income.”

With regard to inflation and the containment of the cost of living, the Commission recognises that the reduction in utility tariffs for households as of April 2014 will have a positive effect on the containment of inflation. The Commission remarks that its forecast does not take into account the government’s commitment to extend the reduction in utility tariffs to businesses in 2015, which, it admits, “could lower overall HICP inflation for that year.”

Government has reasons to be pleased with this forecast and is more than ever determined to maintain this outlook and tries to improve on its expectations.

 

     

– Monday, 5th May, 2014