[WATCH] Malta to get fourth consecutive surplus in 2019, Scicluna says

Malta to get third consecutive surplus in 2019 - Edward Scicluna

Malta will register its fourth budgetary surplus in 2019, finance minister Edward Scicluna said despite a €15 million deficit in the first quarter of the year.

“The race goes on until the end. This happens every year — sometimes it’s over, sometimes it’s under — but one can always do corrections. We don’t have indications as of yet, as it is currently on a cash flow basis. One has to see the figures on an accrual basis. That’s why our ministry exists, to keep controlling to reach the targets. I am confident that we will keep heading down this road and that the surplus will materialise at the end of the year,” Scicluna told MaltaToday.

Speaking at pre-budget business breakfast at Casino Maltese in Valletta, Scicluna said that the theme of this year’s pre-budget document was ‘Sustaining Inclusive Growth’.

“If I were to choose another title, it would be ‘managing success’, because we have obtained success compared to our past record and to our EU peers. It feels now that if we don’t handle it well, it will be the beginning of the end,” he said, adding that Malta’s carrying capacity was not elastic but with careful planning, the growing economy would not put increased pressures on other sectors like construction and housing.

During the first quarter of 2019, the Maltese economy grew by 4.9%, in real terms, over the corresponding period of last year.

The largest growth in Gross Value Added was registered at 12% in the construction sector. The highest growth that followed was in the professional, scientific, technical, admin and support services (10.8%) and real estate activities (10.8%).

Unemployment data covering the first three months of this year shows that Malta recorded one of the lowest total unemployment rates among EU member states at 3.5%. Employment prospects are to remain favourable.

Harmonised Index of Consumer Prices inflation recorded a steady increase in the fist five months of 2019 at 1.7% but still below the 2% EU threshold.

As at the end of 2018, Malta held around €247.9 billion in assets and €241.1 billion in liabilities.

Scicluna said that financial prospects in the world and in Europe were facing new threats.

“What was predicted to happen is happening: worst-case scenarios in terms of trade wars, Brexit and populism. A very influential country, the USA, has decided to put up tariffs, not just with its competitor, China, but with its neighbours, Canada and Mexico. The threats of putting up tariffs for Europe are there,” he said, adding that Europe was now facing pressure to prioritise green finance and climate change.

He announced that the female participation rate in the labour market is continuing to rise and that Malta has finally exceeded the EU28 average, describing this as “very good news.”

The at-risk-of-poverty scale has also declined and it has declined more than EU28 average. There are still 19% of families at risk of poverty.

Other data

Malta’s volume of export in goods and services as a percentage of the global world trade, on the manufacturing side, declined marginally but Malta has made up for it via a higher global export market share in its services.

Scicluna announced that the reduction in income tax rates from 35% to 25% affected 50,000 beneficiaries.

Free childcare is being enjoyed by 15,800 children and 21,000 parents. Tax reductions on pensions affected 22,000 pensioners.

Free transport to school children benefitted 28,000 students.

Malta lost around €60 million in revenue over the first-time buyers scheme — 19,326 benefitted from this scheme which was launched 7 years ago.

28,218 individuals saved €88 million in taxes, Scicluna said.

Malta’s life expectancy is also amongst the top ten countries with the highest life expectancy. The same goes for gender pay gap, placing Malta amongst the first 8 countries with the lowest gender pay gap.