Job creation in Malta ‘robust’ and will outperform eurozone average

Malta's economy will register economic growth of 1.5% in 2013 according to the European Commission's winter forecast, second only to Estonia's 3% inside the 17-member eurozone, and the fifth highest in the 27-member bloc.

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After the failure of the budget to receive parliamentary endorsement, Malta's deficit in 2013 is expected to widen, but spending will fall thanks to tighter recruitment policies inside the public sector, and less pension spending due to the 2006 pension reform.

Again in 2014, the deficit is expected to narrow on the back of increasing demand but also due to less state aid going into national carrier Air Malta.

The EC also said that job creation will remain robust and outperform the euro-average, having reached 1.7% in 2012 on the back of the services sector, but industrial employment kept shrinking.

"As the economic outlook brightens, employment and average wage growth are forecast to strengthen and move towards their pre-crisis average. Unemployment is projected to remain among the lowest in the euro area and further narrow to 6.1% in 2014."

National debt is projected to increase, as a percentage of gross domestic project, mainly due to the financial situation of Enemalta, which the EC believes could entail subsidies.

The EC said consumer confidence started improving in the final months of 2012, and added to increasing disposable income, is project to support household consumption in 2013-14.

"In particular, construction investment is forecast to pick up slightly o the back of EU-funded projects as well as the electricity interconnector with Sicily, which is schedule for completion by end-203. By contrast, housing investment if expected to remain subdued, in line with the expected moderate outlook for the housing market," the EC said.