Despite IMF’s doubts, PM confident deficit target will be met

Prime Minister Joseph Muscat is confident over his government's target to bring down the deficit to under 3% will be met despite doubts raised by the International Monetary Fund.

With a fiscal deficit at 3.3% of GDP and high government and guarantee debt, the IMF said the island must cut spending, reform pension and health spending, introduce more women to the job market, and reform its COLA (cost of living allowance) by aligning it to productivity gains, not inflation.

In a back-handed comment, the IMF said that the Maltese authorities "were more optimistic than [IMF] staff regarding the fiscal outlook" when it comes to their intention to reduce the deficit from 3.3% to 2.7% of GDP by the end of 2013.

"Our indications show the target will be met. I understand the point which the IMF raised but it also gives us the will to work harder," Muscat said.

He welcomed the "positive" comments by IMF in which it praised the financial stability and a resilient economy. Muscat commented the report raised different points " which do not necessarily mean we agree with them".

He reassured the Ministry for Finance was monitoring the deficit target "week by week".