The International Monetary Fund had words of praise for the government’s work in the economic sector, saying that “Malta’s economic growth remains one of the strongest in Europe, reflected by rapid income convergence towards the EU average”, a Department of Information statement said.
IMF experts, according to the DOI, said that the good economic performance was a result of the government’s hard work. “Prudent policies advanced structural reforms and contributed to the strengthening of private and public-sector balance sheets, while steady job creation drove unemployment to historically low levels”, the IMF was quoted as saying.
This success is expected to continue in the coming years, in spite of the international risks and contrary to what the Opposition is saying, the statement said.
The IMF report confirmed another positive analysis made by the European Commission in its autumn forecast, which said that Malta will experience the biggest economic growth in the EU.
The IMF report said that “the mission welcomes the progress made in improving public finances”, noting that the government had reached its target of having a surplus three years before schedule.
It noted that Malta’s growth led to new challenges in the country’s infrastructure and human resources, but “the government’s medium-term strategy to improve road quality and increase the utilisation of alternative means of transport is a step in the right direction”.
“Recent government initiatives to enhance the training and education systems will help contain the skill gap. This, together, with continued steps to boost the incentives to work and delay retirement, would also sustain the upward trend in female labour force participation”, the report said.
“Efforts to expand social housing, such as providing financial incentives for homeowners that make their property available to low-income households, are welcome”, the report said.
In a separate statement, Minister for Finance Edward Scicluna welcomed the IMF 2017 Article IV Mission Concluding Statement, stating that prudent policies and advanced structural reforms contributed to the strengthening of private and public-sector balance sheets, whilst steady job creation drove unemployment to historically low levels.
“I am also pleased to note that the IMF recommendations on building larger fiscal buffers that would add strength to Malta’s fiscal position, are already being implemented through the attainment of an annual fiscal surplus. Furthermore, through the 2018 Budget, we are also addressing the IMF recommendations on social and affordable housing”, Scicluna said.
The report welcomes the Government’s progress in improving public finances. Specifically, the report notes that Malta achieved its medium-term objective (MTO) of a structural balance in 2016, three years ahead of schedule as a result of buoyant tax revenues and contained expenditure growth. It also notes that public debt fell below 60 per cent of GDP. The IMF expects the 2017 general Government surplus to reach 1.3 percent of GDP.
The report also notes that Malta’s economic growth remains one of the strongest in Europe, reflected by rapid income convergence towards the European Union (EU) average. It expects the robust growth to continue in the coming years - mainly driven by domestic demand backed by rising incomes and historically-low unemployment. The IMF further expects the risks to this outlook to be broadly balanced.
The IMF mission acknowledges Malta’s favourable external position, adding that buoyant services exports will continue to sustain current account surpluses.
The IMF also welcomed Government’s plans to upgrade the road network and to push higher utilisation of public transportation which, it states, will help to mitigate endemic congestion, thereby improving the population’s well-being and fostering business productivity.
The report notes that domestic banks remain sound and profitable and invites the Government to continue implementing measures that further safeguard financial stability.