The economic turnaround, from the “biggest deficit” to a financial surplus, was not easy to achieve, according to Prime Minister Joseph Muscat, calling the turnaround an “economic miracle”.  

Dr Muscat was addressing a press call this afternoon at Castille, held together with Minister of Finance Edward Scicluna, in order to announce that the 2016 surplus achieved by the government on accruals was that of €101 million.

Minister of Finance Edward Scicluna explained in further detail how a deficit of -3.0% in 2012 turned to a surplus of 1% in 2016. He said that, in the future, the economy “has to be balanced,” continuing that Malta experienced a deficit due to fiscal slippages throughout the years. A fiscal slippage is the missing of government revenue targets in a country’s budget.

Minister Scicluna added that the “economic success” came about from focusing on reducing the deficit from the beginning of the legislature and “focusing on sustainable economic growth.”

“We have arrived at a surplus through growth, not austerity,” said Dr Muscat, explaining that the Government did not achieve this surplus by freezing benefits or reducing pensions. He said that Malta was “crying out for change, especially in the labor and energy market,” and said that through this surplus are “leaving a financial legacy”.

“We did not only remove the deficit, but we also left wealth for future generations,” said Dr Muscat, “and that is what is important.” He mentioned the change to gas energy and an active labor market as two factors pertaining to this surplus.

Bringing attention towards the increased expenditure, Minister of Finance Edward Scicluna said that the difference in expenditure over the previous years was less than the difference in income.  He said that expenditure was spent to improve sectors such as the health sector and the education sector.

In 2016, Malta registered the second largest economic growth in the European Union, after the Netherlands.