Finance Minister, Clyde Caruana said today that next year the government energy and food subsidies will reach €608 million.

Presenting the pre-budget document on Friday, Caruana said that government energy and food subsidies will amount to €472.5 million by the end of 2022.

This large sum for 2023 will amount to 3.6% of gross development product (GDP). That being said, Caruana emphasised that the government is still determined to continue offering this service to the Maltese population.

Caruana also said that as long as this crisis continues the government will still look towards reducing the deficit next year.

The deficit this year should be around 5.8%, which Caruana pointed out is well within last year’s targets.

 

Caruana pledged that even though the expenditure will be more next year, they will still manage to reduce the deficit next year.

The inflation rate in Europe has reached 9.8%, while in Malta it reached 6.8%, which is one of the lowest in Europe.

In absence of the energy subsidies, Malta’s inflation rate would be 4.1% more than the EU average.

Diesel would have risen from €1.21 to €1.79 per litre and petrol from €1.34 to €1.79 per litre, he said.

The document called out the European COP 26 declarations for being “dead and buried”. It said that Europe is now looking towards using fossil fuels again to meet the supply.

It followed by saying that a significant amount of energy is required before more focus is needed on renewable energy infrastructure.

In 2021 Malta recorded a gross domestic product growth (GDP) of 10.3%, whereas the European economy grew by 5.4%. In the first quarter of 2022 8.5% growth was recorded.

The Retail Price Index (RPI), which is used to calculate the Cost of Living Adjustment (COLA), has increased by 5.1% from January to June. This includes, food 1.9%, housing contribution 0.9%, recreation and culture 0.4%, household equipment and maintenance costs 0.3%.

When referring to energy the document revealed that the interconnector increased by almost 400% in the last 12 months, from 0.11 per kWh in August 2021 to 0.54 per kWh in 2022.

“We don’t see a situation where we will stop doing what we’re doing,” Caruana said.