Government deficit is expected to go down to 2.8 per cent and the National Debt will reach the 70 per cent of GDP mark by the end of the year, said Parliamentary Secretary Tonio Fenech during the launch of his ministry’s newest publication, a quarterly Economic Bulletin.

The bulletin will shed light on the economic performance and its compilation is independent of the Central Bank’s publications. He said this is normal practice in a lot of countries. He described the publication as a thoroughly researched work which will shed light on the economic situation of the country.

The parliamentary secretary spoke about some of the economic indicators illustrated in the bulletin. He said the external shocks which left the biggest effect on the economy were the international rise in the price of fuels and the staunch competition, especially from emerging economies. This competition took its toll on the Maltese tourism and manufacturing sectors.

Mr Fenech said the economy has grown stronger in the last two years, after there was negative growth in real terms in 2003 and 2004. The economic growth registered for this year’s first six months is in line with that of last year. He said this is being sustained by domestic demand conditions especially in telecommunications, transport and the financial sector. He also explained how a significant rise in exports and imports was registered in the first two quarters of 2006.

The bulletin, Mr Fenech said, shows that the loss of jobs from the manufacturing industry was offset by the creation of new jobs elsewhere. He also spoke about the increase in foreign investment, which last year stood at Lm193 million and for the first half of 2006 stood at Lm157 million, Maltacom privatisation monies included.

Mr Fenech commented on the inflation rate, which is expected to go down to 2.5 per cent, while there are positive indicators with regard to social development.