The Ministry for Finance welcomes the European Commission Spring Forecast 2016, which expects Malta’s economic growth to continue to be robust, fuelled by the two most vital components for sustainable growth, investment and household consumption.
PRESS RELEASE BY THE MINISTRY FOR FINANCE
Indeed in its opening statement, the European Commission positively remarks: “Growth is…. to remain robust in 2016 and 2017”.
The report further acknowledges that the Government’s policy of new investment in healthcare and education will support investment in the coming years.
The European Commission also expects the increase in job creation and real wages to continue supporting growth in household consumption boosting economic activity in the coming years. This, after growing strongly in 2015 as a result of “a decline in the saving rate, as lower electricity tariffs, falling unemployment and a rise in wage growth impacted positively on consumer confidence” .
The 2016 Spring Forecast expects inflation to remain close to the target inflation rate set by the ECB.
On the fiscal front, the European Commission acknowledges the 0.5 percentage point reduction in the deficit-to-GDP ratio in 2015 which managed to bring the deficit below the 2.0 per cent level to 1.5 per cent in 2015. It expects the deficit to continue declining to 0.9 per cent and 0.8 per cent in 2016 and 2017 respectively.
Similarly, the debt-to-GDP ratio is projected to continue on a downward trajectory decreasing from 63.9% of GDP in 2015 to 60.9% of GDP in 2016 and further down to 58.3% by 2017. These positive fiscal forecasts further confirm the European Commission’s confidence in the Government’s fiscal plan.
Minister for Finance Edward Scicluna remarks: “This report is a further confirmation that the Government is succeeding in achieving sustainability with regards to both growth and public finances through good economic and fiscal governance’’.
Wednesday 4th May 2016