Readers hope to witness an exciting 2016 with the euro surviving the resurgence of a strong US economy, and of course next year may bring more surprises in the political scene with critical French and German elections and with the spectre of the UK's planned in-out EU referendum. There may be more terrorist activity making the headlines of the media while it is inevitable that Western Europe will need to accommodate more migrants fleeing from trouble spots such as Syria and Iraq. The number of terrorist attacks last year in Central Europe was compounded by the arrival and resettlement of over a million Muslim refugees, all seeking economic and political shelter from civil war in the Middle East which seems to have become a cradle of tension generated by Islamic State militants. All this may unsettle investor sentiment and some economists predict that European companies face an increasing divergence in global economic and monetary trends.

Yet, the US economy appears to be returning to good health, while on the other hand emerging-market growth prospects such as South Africa and Brazil have shifted down a notch mainly in response to a slowdown in manufacturing and the social unrest caused by increasing corruption in their  governments. The sluggishness of the China economy will continue to drag down oil prices reflecting the glut in oil inventories where supply is not matching demand mainly as a result of the obstinate policy by OPEC to continue pumping up more oil and flood the market. These geopolitical developments in 2016 are important wildcard that sometimes have a negative impact on the corporate sector.

At first glance, the long-awaited European recovery and the advent of cheap oil and gas should leave a positive mark on the European economy, but the benefit mainly accrues to those manufacturing and service sectors that operate regionally and where competitive pressures aren't too intense. Another challenge to Western economies is the rapid change in the pace of technological advances which is accelerating with data analytics, artificial intelligence, and robotics -all areas benefitting from increased US investment. Naturally, these developments represent a competitive threat to traditional businesses in Malta, yet for smart operators they can present opportunities for growth. The growth potential was highlighted by the recent favourable upgrade by Standard & Poor's agency to a stable outlook BBB+/A-2.

In its latest report, the agency says inter alia that Malta's positive outlook reflects its opinion of at least a one-in-three likelihood of an upgrade within the next 18 months if medium-term growth continues without a return to current account deficits or emergence of other macroeconomic imbalances. The rating agency could also raise the ratings if fiscal consolidation advances faster than it currently expects, including further improvements in budgetary sustainability - for example, progress on pension and healthcare funding reform measures as announced in the budget.

Positive trends are seen in tourism, with October arrivals rising by 10.5% on a year earlier, while nights stayed and expenditure also increased markedly. As a result, during the first 10 months of 2015, tourist arrivals increased by 5.6% on a year earlier, while nights stayed and total spending went up by 5.0% and 7.4%, respectively. Although all major expenditure components increased substantially on their year-ago levels, spending on accommodation and "other expenditure" experienced the largest gains.

In the third quarter of 2015, the number of cruise liner calls increased to 102, from 91 a year earlier. As a result, the number of foreign cruise liner passengers rose to 192,570, an increase of 39,522 over the same quarter of 2014. These positive trends are reflected in the improvement registered in the number of new jobs created. In fact, according to the Labour Force Survey (LFS) the unemployment rate stood at 5.4% in the second quarter of 2015, down from 5.8% a year earlier. As can be expected with more shoulders to the wheel, more tax revenue is collected such that during the second quarter of 2015, revenue grew by 7.5%. Meanwhile, receipts from capital and current transfers went up by a respectable 19.4% on the back of higher capital transfers.

The miracle about to happen is that the Minister of Finance may soon report a balanced annual budget - something that has never occurred in the past 30 years. In 2016, party apologists can lax lyrical about the soundness of the asset management by the financial wizard minding the store at the Ministry of Finance - Professor Scicluna. It is amazing, how in a short period of less than three years since the change of government, the prescribed threshold of 60% net  government debt to GDP set by the Commission will be reached .This ratio of debt goes down  to54% of GDP by the end of 2018, from 72% in 2009.

Party apologists blow their trumpets and rub their hands in glee saying that the economy continued to expand robustly in 2015, with real gross domestic product (GDP) reaching 5% reflecting superlative results gained by both the tourist industry and the gaming sector -albeit the latter had a bout of hiccups last summer and in the process, the Attorney General promptly reacted by freezing €4 billion in assets of a number of Italian operators (who laid off workers and closed shutters).

Naturally, the proof of the pudding is in the employment statistics and these point to a healthy and steady improvement reaching historically low levels. Sadly, Enemalta will not generate profits until 2017 even though the price of oil and gas may reach a low of $25 per gallon. Other state-owned enterprises also represent fiscal risks, as exemplified by this year's government financial support to Air Malta and the accumulated debt outstanding at the Freeport.

All this bonanza did not come by reciting Hail Marys but by the government's sheer determination to improve growth in private consumption buttressed by falling unemployment, higher exports, lower energy costs and a concerted drive by Malta Enterprise to attract new foreign investment.  The deal secured with China to invest in EneMalta - the ailing national utility (with €800 million in foreign debts) has turned the tables in its favour and the energy sector is further consolidated by capital injected in the construction of a new gas power plant. This is driven by a consortium led by Siemens. All this financial wizardry is reflected in the exemplary GDP growth being second best in EU - contrasted to 2009 when the economy was hit by a temporary recession.

But it is not all hunky dory and dark clouds can be seen gathering on the distant horizon, as Malta's tax regime which attracted significant foreign investment into the country is sensitive to a eurozone-wide drive to standardize corporate tax regimes. The drive for tax harmonization by the Commission masked by the introduction of a common consolidated tax base which, unless resisted, may sound the death knell for our thriving financial services industry; it could also perhaps wind up most of the 400 iGaming companies that are currently using the island as headquarters for their online gambling activities.

To conclude, we concur that living in Malta is not heaven on earth yet its economy is performing well and more jobs are being created. Having seen the travails of other countries, the terrorist acts in central and eastern Med, we can modestly brand Malta as a maverick state which seems to have broken the trend of economic hurdles. Should it continue on its present growth trajectory, it may qualify as the new Tiger in the Med. Take out the flute glasses and crack open the champagne- let us all gather merrily to celebrate in our eclectic roofless theatre, and never mind the inconvenience of another maremoto.

Mr Mangion is a senior partner at PKF, an audit and consultancy firm, and has over 30 years experience in accounting, taxation, financial and consultancy services.

He can be contacted at [email protected] or on +356 2149 3041.