AD calls on government to counteract low inflation

Alternattiva Demokratika asked for the government’s plan to counteract the “low inflation phenomenon which is hindering the EU's economic growth,” noting that four EU members are already experiencing deflation. 

Inflation in Malta fell drastically from 1.8% in March 2013 to a record low 0.5% in November 2013. This was also experienced in the EU with a reported average inflation of 0.7%.

AD chairperson Arnold Cassola noted that Malta’s imports and exports fell by 17% and 20% respectively during the first eight months of 2013, when compared with the corresponding period last year.

"This clearly shows the drastic decline in domestic and foreign consumption and can create havoc with public and private efforts to repay debts and risks bringing reasonable consumer demand to a halt. Uncontrolled consumption of goods is bad, but consumption of cultural services and online services is beneficial and needs to be encouraged,” Cassola said.

He remarked that the decrease in overall consumption is having an effect on manufacturing companies, with four local manufacturing companies considering lay-offs or offering reduced hours due to lack in demand. 

AD urged the Government to disclose its plans of how it intends to counteract the effects of low-inflation, considering that Budget 2014 was forecasting a drastic increase in total Income Tax, VAT, licenses and is lacking in plans of how to attract new decently-paid jobs.

“This is highly contradictory and the Government must face reality and be honest with the nation," Cassola concluded.