Inflation to grow faster than salaries – stability report to the EU

Malta’s latest update on its stability programme to the European Council – a programme to bring down the deficit to below 3% of its gross dometic product – is forecasting a yearly 1.5% increase in per capita income, while inflation will be increasing by over 2% until 2014.

Shadow finance minister Charles Mangion said the update report’s forecast went against the tendency in the rest of Europe to have real wages increase above the inflation rate.

“The report confirms that consumption by families will increase by just 1.1% up until 2014, an increase that is much lower than the increases of the preceding five years. This will affect the self-employed who will see their revenues decrease under Nationalist leadership,” Mangion said.

Exports will be increasing by 3.5% according to the same report, while the EU average is expected to hover at 6.9%.

“We’re losing out on our export potential. That’s why clamping down on inflation is an essential element,” Mangion said. “The fact that fuel and utilities prices are increasing every month without explanation is what is pushing inflation up, and eroding our competitiveness.