Although economic recovery from the global recession has started, next year’s Budget needs to be drawn up in such a way that ensures the economy is not disrupted, but rather given time to grow without too many burdens, Finance Minister Tonio Fenech said this week.

Economic growth is not expected before next year and, according to projections supplied by Mr Fenech at the end of a Malta Council for Economic and Social Development meeting on Wednesday on the pre-Budget consultation document, the local economy is expected to register either zero or negative growth of between 0.8 and 0.9 per cent this year.

The global economy was worst hit at the end of last year and the beginning of this year. Malta, despite also having been affected negatively by the recession, was among the countries that were least hit, as the rest of the EU is expected to register negative growth of about four per cent this year.

Mr Fenech said the European Commission had acknowledged the Maltese government’s efforts to sustain the country’s economic activity.

Had it not been for the government intervention to provide assistance to certain factories, for instance, about 2,000 people would have been unemployed, said Mr Fenech.

In the last two months, unemployment rates settled, and the number of unemployed is now about 1,000 more than it was last year.

He said the economy is currently facing challenges in the tourism sector, which is going through a period of uncertainty.

“Malta seems to have managed to keep its head above water, but next year’s Budget will be a delicate one. Unless it is given the time to grow and develop, other sectors like social services would not be able to grow.

“The social partners spoke about the need to continue fighting bureaucracy to facilitate business, increase productivity levels and invest in the development of the country as a product, while retaining the social balance.”