Positive outlook for the Maltese economy
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The Ministry for Finance notes with satisfaction the forecast by Ernst and Young (EY) which was issued earlier today. EY, in collaboration with Oxford Economics, is foreseeing a strong performance by the Maltese economy during this year, supported by a buoyant tourism sector, robust consumer spending and growth in exports.
Minister for Finance, Edward Scicluna, commented that “this forecast by Ernst and Young is yet another confirmation of the confidence that surrounds the Maltese economy. Renowned local and international institutions are increasingly positive that our economy will continue being among the fastest growing in the Euro Area”.
EY also noted that consumer spending rose by 3.3 per cent last year, registering the fastest pace of growth in more than ten years, supported by increased employment and a record-low unemployment rate. EY expects spending by families and businesses to grow during this year, foreseeing a healthy rate of 2.5 per cent sustained by higher wages and low inflation which will boost further the purchasing power of households.
With regards to the current account balance, EY noted how the Maltese economy successfully managed to turn a persistent deficit in the current account to a surplus of 8 per cent of GDP in 2014. A strong performance by the tourism sector is expected to help maintain such surplus with tourist arrivals expected to continue growing strongly also this year, thanks to the increased efforts made in recent years to improve the quality of the tourism product and to attract tourists from a wider range of countries.
EY also noted the positive performance of public finance during these two years, pointing that the current Government’s fiscal deficit is well within the Euro Area ceiling of 3 per cent of GDP. EY is also expecting the deficit to continue falling in the coming years, reaching close to 1 per cent in 2019, confirming the targets set by the Government.
EY made reference to the long-term sustainability of public finances, noting the need to safeguard the sustainability of state pension and that of public healthcare. EY also highlighted the measures being undertaken by the Government in this regard, noting the increased labour market participation registered in recent years as well as the adoption of the National Health System Strategy.
(Source: Ministry of Finance)