The Malta Independent 23 June 2024, Sunday
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‘We should not be scared of economic growth,’ says Finance Minister

Helena Grech Tuesday, 27 February 2018, 15:44 Last update: about 7 years ago

Finance Minister Edward Scicluna said that Malta should not be afraid of economic growth because there are no red flags indicating an economic bubble.

“We should not be scared as though it [the economy] is a balloon that could burst any day,” he said while addressing a press conference on the increase in ratings awarded to Malta by Moody’s and DBRS economic ratings agencies.

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One key indicator of an economy facing a bubble is excessive inflation, which has been registered as below one per cent, Scicluna said.

He also announced a government commitment to see the national books balanced without proceeds of the Individual Investor Programme (IIP). Currently, government saves 70 per cent of all IIP proceeds which has led to government registering a surplus.

Turning to the ratings awarded to Malta, Scicluna took aim at previous Nationalist Party governments for passing on the two main risk factors preventing further progress: government debt and contingent liabilities, referring to government guarantees.

“This government is doing all it can to reduce the debt and guarantees, and that is how we have achieved economic upgrades so far. Previous administrations had been downgraded because of increased debt and contingent liabilities. The latter are difficult to reduce because they are tied with two institutions: the Malta Freeport which has a €200 million guarantee and Enemalta which carries a €700 million guarantee following intensive debt rescheduling.”

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