The latest figures published by the National Office of Statistics show that statistically we have experienced an economic recession, as during the last few months the economy has not grown.
This confirms that, like any other economy, we remain susceptible to the international climate and we cannot afford to be complacent. Restructuring, reform and continuous adjustment should remain the order of the day if we want to reap any benefits.
As shown by the latest Spanish episode, it is not over yet. Nevertheless, a deeper analysis of the official statements shows that while there is no room for complacency, neither is there cause for alarm. This analysis shows that, rather than being the situation across the board, the lack of growth is due to two main factors: the government subsidy of energy bills despite an international hike in the price of oil and a fall in exports during the first quarter by a major private company.
These two factors had a negative effect on our GDP figures in spite of the fact that most of the other sectors registered growth. Exports, for example, showed a 4.3 per cent increase!
This is because when calculating the details of GDP, debt and subsidies are considered to have a negative effect. The government was well aware of the direct impact an increase in international oil prices would have, but still decided to retain the same rates for our energy bills. This measure increased Enemalta’s debts.
If the above factors are discarded, the Maltese economy would have registered a nominal growth of 2.4 per cent, which goes to show that, generally speaking, it is not faring badly.
On the other hand, our employment figures require no interpretation – they simply confirm the strength of our economy. With sectors such as financial services, gaming, aviation and the pharmaceuticals going strong, unemployment figures place us among the top five EU countries with the least number of unemployed.
Recently, the ETC declared that different industries seeking to employ more staff showed a 25 per cent increase on last year’s figures. The EU Employment and Social Situation report, published in March, confirms that the present employment figures compare favourably with those prior to the crisis, as Malta registered the second highest increase in the employment rate among the 27 EU countries during the last three years. Germany topped the list with 2.2 per cent, while Malta came a close second with a two per cent increase.
Last month the International Labour Organisation remarked that among the more advanced economies in the world, the rate of employment had increased in just six countries, compared to the time before the 2009 crisis. Malta is one of these six countries. The fact that 20,000 new jobs were created in the last four years is not only an impressive achievement but proves the government’s determination in this vital sector of the economy.
In the last 12 months we have also experienced an increase of 3.3 per cent in wages compared to last year’s figures, and during the last four years the average wage has risen by €2,000 and the minimum wage by €1,000 per year. At the same time it has emerged that Maltese workers are amongst the least taxed in the EU.
Twenty thousand jobs is not just a figure. It means thousands of people and families earning and improving their standard of living and as such it is not to be taken for granted.