Fifty-seven more shops will take part in the historic pact which was reached last Thursday, when the government announced that the price of 400 store products will be reduced by up to 15% in a bid to curb inflation, Economy Minister Silvio Schembri said Monday.

Addressing a news conference, Schembri said that this agreement was voluntary and that no one was legally obliged to agree. He continued that the essence of this agreement was stability. “That we bring stability in the prices of some of the most essential products.”

He said that since opening applications on Thursday, “57 small shops” have applied to be included in this arrangement,  in addition to the 200 establishments which had already signed up.

Speaking on why there was the need for government intervention, the Economy Minister said all countries throughout the last three years have been impacted by various factors, primarily the pandemic as well as the United Kingdom’s departure from the European Union and the Russian-Ukrainian war. He also mentioned the ongoing conflict in the Middle East as an additional factor.

He continued that all these factors have left an impact which has left instability throughout the world and that among these factors was an inflationary effect, as the supply chain was impacted and an element of uncertainty was introduced which in itself resulted in prices being raised. “That is why we could see that there was an extraordinary increase in prices, you could say that there was an explosion in prices on many factors.” He added that the element of uncertainty affected the economy in additional ways, such as a rise in interest on loans.

The Minister said that when a country has a prolonged period of inflation, the country’s competitiveness is reduced. He said that this government has taken various strong measures against both the economic and social consequences of all this, with a focus on stability.

He said that this element of stability was introduced primarily through the use of subsidies on water, gas, electricity, and fuel. “That measure alone has an allocation of €350 million for this year, last year was another €650 million. We are talking about significant hundreds of millions, which if we did not have and still have a strong economy capable of taking these hits, would mean that families and businesses would have to pay at least an additional €2000 yearly due to increases in electricity, water, and fuel prices.”

Subsidies were also given for flour and animal feed among others primarily to prevent the price rise on essential products such as bread, Schembri said. He added that 50 medicines also saw a price reduction.

European Parliament candidate Clint Azzopardi Flores said that there were other more social measures, such as the reduction in tax on overtime and part-time, the introduction of an additional COLA mechanism, and an increase in pensions, children’s allowance, and minimum wage.

As a result of the government’s actions, he said that Malta’s rate of inflation remained below the European median, but that a pact such as the one which was signed on Thursday was necessary to begin reducing the inflation rate.

The agreement will be put into action starting on 1 February, and the list of products included in the arrangement will be available on the https://ekonomija.gov.mt/ website.