The Finance Ministry noted with satisfaction that the European Commission has positively revised its 2013 to 2015 deficit forecast for Malta. According to the Winter Forecast, Malta has the strongest employment growth among all EU Member States. Malta has also the fourth lowest unemployment rate and retains strong growth projections, the government said in a statement.

The revision of deficit figures follows two consecutive forecasts which predicted a deficit in excess of 3% for 2013 and 2014. This is now revised positively to 3% in 2013, and 2.7% in 2014 and 2015 respectively. This emerged from the Commission’s Winter 2014 European Economic Forecast, published on Tuesday 25th February 2014.

Finance Minister Prof. Edward Scicluna welcomed the forecast as one that confirms the Government’s own economic outlook, and demolishes the unfounded doomsday claims of the Opposition.

“Blow by blow, the Commission’s Winter Forecast destroys every negative tenet that the Opposition has put forward in its attempts to suggest that the economy is failing. Be it on economic performance, unemployment, investment, or foreign trade, this forecast confirms that the Government has achieved an economic turnaround and is looking forward to continued success,” Prof. Scicluna said.

Indeed, with regard to economic growth, the Commission noted that “real GDP is estimated to have increased by 2% in 2013 as a whole, up from a mild 0.9% growth in 2012” and that that “it is projected to remain largely unchanged, averaging 2.1% in 2014-15.” This confirms that the economy is experiencing a positive turnaround and is expected to keep performing well, a scenario which contrasts sharply from the Opposition’s claims.

With regard to unemployment and job creation, the Commission Forecast similarly sweeps away the Opposition’s hollow claims that the economy is not generating adequate levels of employment. Indeed, the employment growth forecast for 2013 ranks Malta as best performer in the EU for the years 2013 to 2015.

The Opposition’s claims that unemployment is on the increase are also dismissed out of hand, as the Commission confirms that Malta’s unemployment rate is currently fourth lowest in the EU, and that the unemployment rate is set to decline to 6.4 percent.

 

Furthermore, the Commission acknowledges the favourable effect of budgetary initiatives on labour market participation as it notes that this “is set to remain on an upward path, largely reflecting higher activity by women and older workers.” 

The Commission also recognises the positive effect of the reduced energy tariffs, noting that these, along with favourable labour market conditions, “are projected to support a further improvement in household consumption.” 

With regard to investment, the Commission’s Winter Forecast also contradicts the Opposition’s claims that investment is set to decrease, as it remarks that “investment is projected to improve.” Regarding international trade, the Commission remarks that “overall net exports are projected to continue to contribute positively to real GDP growth and the current account is forecast to remain in surplus over the forecast horizon.”

“On all counts, the Commission’s opinion is that the economy is expanding and the country's public finances are being put on a sustainable path,” Prof. Scicluna said.