IMF report on Malta ‘reassuring’ – Edward Scicluna

The finance minister Edward Scicluna, welcomed the International Monetary Fund (IMF) Executive Board's conclusions on Malta's Country Report as further confirmation that the new Government's policies are taking the country in the right direction.

"I am especially pleased to note that the IMF's Executive Directors have reconfirmed the resilience of our economy, underpinned by solid macroeconomic and financial fundamentals, and the underlining soundness of our banking system," Scicluna said.

He added that it is also encouraging to note that the IMF has recognised the government's commitment to addressing those key priority issues that the IMF recommended be addressed in their own report.

These areas, Scicluna noted, include energy planning, higher female labour participation, enhancing education attainment, and overall economic diversification.

The finance minister also welcomed the IMF's remark that the government is committed to return Enemalta to profitability, and "has embarked on a major reform program to reduce utility costs and diversify energy sources."

He also underlined that the government is already actively working towards addressing labour participation through the free child care centres initiative, addressing early school leaving, and exploring economic diversification through the nurturing of new markets, like the maritime industry.

Regarding the fiscal deficit, the IMF noted that the 2012 deterioration arose from the election cycle and Scicluna said that the IMF's medium term recommendations for addressing the deficit, which include a clear rules-based budgetary frame work and an independent fiscal council, are among the measures that have been taken on board by the new government.

Scicluna noted the IMF's recommendations regarding the concentration of loans to the real estate and construction sectors.

"The Directors welcomed the progress in strengthening the regulatory framework for banks. The Government is in fact in the process of passing legislation in Parliament to enshrine the recently-established Joint Financial Stability Board in the Central Bank Act."

Moreover ther minister noted that the government was in the process of drafting a Memorandum of Understanding between it, the CMB, the MFSA, and the FIAU, in order to monitor financial activity on the island, and to coordinate financial stability measures.

"The conclusions reached by the IMF Directors are reassuring as they strengthen the new government's resolve in pursuing its economic and financial targets," Scicluna said.