The Malta Independent 23 February 2020, Sunday

Partit Demokratiku warns of the dangers of a runaway economy

Wednesday, 24 April 2019, 14:31 Last update: about 11 months ago

Partit Demokratiku today welcomed the cautious remarks expressed by Finance Minister Edward Scicluna, which contrast with the very optimistic declarations made by Prime Minister Joseph Muscat on our country’s state of the economy. 

Partit Demokratiku notes:

(a)          A primary account surplus of €251.5m is registered before interest and capital expenditure. If the latter two parameters are to be accounted for, Malta’s consolidated deficit for 2018 would be €70.2m;

(b)          The effects of government’s increase in 12.7% recurrent expenditure is compared to only 6.3% increase in recurrent revenues;

(c)           Without IIP, we would have had a primary deficit.

“Malta is clearly exposed after reductions of IIP coupled with the fact of an eventual, inevitable slow-down in economy. It is not easy for government to reduce recurrent expenditure in the short-term, so a future significant growth will be worrying. We have an unsustainable economy,” stated Party Leader Hon Godfrey Farrugia.

“The 12 month rolling average inflation rate that has increased from 0.9% in 2016 to 1.3% in 2017 and 1.7% in 2018 has been not been used wisely as most of the recurrent expenditure has gone to jobs for the boys,” stated MP Marlene Farrugia. 

Partit Demokratiku said that Malta have doubled its infrastructure expenditure in 2018 and are fuelling an economy that was already fully employed.

Partit Demokratiku noted that a government that holds Malta dear would tighten on spending during an economic upturn and spend more on capital expenditure during a slow-down. Our economy is unsustainable, given the huge increase incurred in unproductive recurrent expenditure and government’s dependence on IIP. PD is for an economy that is determined by values and not volumes.

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