Updated | Malta out of recession, PN takes Joseph Muscat to task over ‘false prophecies’

Quarterly figures issued by the National Statistics Office today confirmed Malta's 0.9% growth in gross domestic product for the second quarter of 2012 had taken out the island of the recession it encountered at the start of the year.

The provisional figures appear to confirm finance minister Tonio Fenech's optimistic outlook he told a pre-budget meeting back in June that Malta's results in job creation, wage increases, exports and tourism had shown an upward trend despite negative economic growth in the last quarter of 2011 and the first quarter of this year.

Malta experienced two consecutive drops in growth of its gross domestic product of -0.3% and -1% between September 2011 and March 2012, indicating the economy's slowdown may be experiencing a recession.

Fenech had attributed Malta's recessionary slide due to some €22 million in losses incurred at Enemalta, and a drop in exports for ST Microelectronics.

Fenech had said the fact that the utility rates had not been increased had contributed to further losses at the national energy corporation. "But this confirms the position taken by the government at the start of 2012, that the deterioration of the international economy, particularly in the eurozone, and the increase in the price of oil would impact the country."

In a statement, the finance ministry said the government's economic policy had created new jobs and attracted more investment.

Amongst the best performing sectors were IT and communications, with a growth of 8.5%, financial services (7.9%), arts and recreation (6%), and professional services (5%).

Salaries increased by 2.6%.

"These results confirm the prudence government exercised during these internationally difficult times, in strengthening aid to the private sector to invest more, diversify its produce, export more and create more jobs," finance minister Tonio Fenech said.

"New financial schemes for factories were provided, as were for hotels and restaurants, in a bid to make them more competitive."

Fenech also said that employed people had increased by 1.5% to 150,700 over the past 12 months, while unemployment at 6% was the fifth lowest in Europe.

In another related statement, the Nationalist Party took Labour leader Joseph Muscat and MEP Edward Scicluna to task over their 'false prophecies'.

"Today's news confirms Labour and Muscat are false prophets who foresee economic disasters when positive economic results are being reaped," the PN said.

"Edward Scicluna himself predicted Malta would not fulfill the euro criteria or reap any new growth in the last months. This is the same Scicluna who claims we should adopt Mintoff's economic policy, which only resulted in more unemployment."

Provisional estimates indicate that the Gross Domestic Product (GDP) for the second quarter of 2012 amounted to €1,658.8 million, an increase of 3 per cent compared to the corresponding quarter last year. In real terms, GDP went up by 0.9 per cent.

Total final consumption expenditure in nominal terms increased by 1.5 per cent. In real terms, total final consumption expenditure decreased by 1.4 per cent. Gross fixed capital formation increased by €8.7 million in nominal prices.

In real terms gross fixed capital formation declined by 1.7 per cent. Real exports and real imports increased. Details on developments in the Expenditure Approach components of GDP.

The year-on-year increase in GDP at current prices amounted to €48 million, and is estimated to have been distributed into an €18.7 million increase in compensation of employees, a €22.9 million increase in gross operating surplus of enterprises, and a €6.4 million increase in net taxation on production and imports.

Considering the effects of income and taxation paid and received by residents to and from the rest of the world, Gross National Income (GNI) at market prices for the second quarter this year is estimated at €1,670.3 million.