IMF delegation in Malta in ‘mid-November’ for annual visit

Asked by Business Today to confirm whether an IMF delegation was or is in Malta for its annual visit to prepare the annual IMF report about Malta, a spokesperson for the IMF told Business Today: “No, no IMF team is currently in Malta.

“The 2010 Art IV consultation – the annual check-up of all our member countries' economies – will take place in mid-November,” the IMF spokesperson told Business Today.

She also revealed that the tentative dates for the eleven-day visit of the IMF’s mission to Malta were “11 to 22 November 2010”.

Asked by this paper about the dates when the IMF would be publishing its annual report on Malta for 2010, the IMF spokesperson revealed that the report was “likely to be published in late January 2011, after the Executive Board discussion”.

Last year, the IMF had taken the unprecedented decision of publishing an interim report on the state of Malta’s economy at the end of its eleven-day visit in Malta on 14 July 2009.

The IMF had projected that the Maltese economy would have contracted by 2.0% in 2009, with “a modest recovery” in 2010.

Moreover, the IMF report had estimated that Malta’s budget deficit would have fallen below the 3% threshold set out by the EU’s Stability and Growth Pact only in 2013, with public debt reaching 70% of GDP.

In its interim report, the IMF had warned that Malta’s economy was facing “its first test following successful EU entry and euro adoption.”

The prospect of euro area membership had provided “a useful anchor for reforms until 2007, and the common currency has helped Malta navigate troubled waters since then,” the IMF had explained in its interim report.

“Yet, the unfavourable external environment is now challenging the economy’s resilience, threatening to unravel past efforts at fiscal consolidation, and possibly holding back the reform impetus, even as the convergence process remains incomplete,” the IMF had warned in last year’s interim report on Malta.

For Malta to “fully grasp its growth opportunity going forward and close the income gap with the euro area, the country needs to build consensus around a renewed reform strategy,” the IMF had insisted.

The IMF had projected “a growth contraction of around 2% in 2009, followed by a modest recovery in 2010.”

Key elements of the structural reform indicated by the IMF had included “resuming fiscal consolidation once the recovery is established to build buffers against future external shocks and as the population ages; further strengthening the financial supervisory framework to keep up with the rapidly expanding sector; and completing the labour and product market reforms while continuing to reduce the public sector’s involvement in the economy, so as to further the move towards higher value-added activities”.

The IMF interim report had been forecasting that, “notwithstanding the disappearance of substantial spending one-offs related to the liquidation of the Shipyards, the general government deficit in percent of GDP would only marginally improve from the 2008 outcome.”