We publish today two authoritative reports on the Maltese economy which have been issued in these past days but which unfortunately were given rather short shrift by the Maltese media and even by the Maltese political parties.

These are the IMF report about the Maltese economy and the Spring Forecast by the European Commission. These can be found starting from Page 2.

To complement this, on our front page we give today findings published by Eurostat just a couple of days ago which measure changes in disposable income of citizens in the EU in the troublesome years 2009 and 2010.

Taken singly and collectively, the Maltese economy comes out with flying colours from these analyses which are based on facts, not perceptions. To take the Eurostat study, Malta emerges as the country which had the highest increase in median income, adjusted to take into account inflation, in the entire EU.

The IMF Report also says that “Malta has shown remarkable resilience in the face of a major crisis in Europe”.

There are also some divergences, as the reports are not carbon copies of each other. By and large, the general impression seems to be that the Commission’s report is less optimistic and more critical than the IMF one – but that may be just an impression, of course.

It says, for instance, that “it was only the significant increase in government consumption expenditure that supported domestic demand” thus belying other, more optimistic, readings.

Household consumption, it adds, is forecast to become the main contributor to economic growth over the forecast horizon, on the back of stable labour market conditions and improving consumer confidence following the parliamentary elections in March.

The general government deficit increased by 0.5 pp in 2012, reaching 3.3% of GDP. “The increase was due to accelerating intermediate consumption, higher social transfers and the rise in compensation of employees in the public sector. The latter occurred on account of the renewal of collective agreements in a number of sectors, including health and education, while the government was committed to restraining hiring.”

Then the Commission’s report adds the ominous words: “The approved 2013 budget appears to be expansionary. As a consequence, the deficit in 2013 is expected to widen to 3.7% of GDP.”

It adds: “The increase in tax revenue related to the pick-up in economic activity only partly compensates for the disappearance of the one-off revenues registered in 2012. In addition, income taxes are projected to decelerate on the back of measures to gradually reduce the overall income tax burden in 2013-15. As a result, current revenues are projected to decline marginally. In 2014, the deficit is projected to improve slightly, reaching 3.6% of GDP mainly due to improved labour market conditions.”

The last point the Commission makes is: “After increasing by ½ pp of GDP in 2012, the structural deficit is expected to improve mildly by ¼ pp of GDP in 2013, on account of one-off measures. Under the usual no-policy-change assumption, the structural deficit improves further, albeit only slightly, in 2014.”

These are the Commission’s usual nuanced and understated conclusions. But the figures are crystal-clear: the deficit has widened to 3.7% of GDP and, contrary to what the government has stated in the recent Budget Speech, not only will the deficit not reach 2.7% by the end of this year, it is projected to improve marginally to 3.6% of GDP in 2014.

This of course entails consequences. On one level, there is of course the risk of new investigations by the Commission with possibly punitive measures. Another consequence will no doubt be the government coming under renewed pressure to bring the deficit down as soon as possible.

The fact that the Commission does not wield the big stick in its Spring Forecast does not mean that the measures that have been agreed upon by all member states will be held in abeyance because ‘Malta is a small country’ or because Malta ‘has been rather virtuous in the crisis’.

It is quite surprising that the only official government reaction to these two reports has been satisfaction regarding the confirmation by the Commission and IMF that Malta’s financial services sector is no threat at all.

That, of course, is true, but hardly the matter.