Economic growth in Malta to reduce rhythm, but will remain the biggest one – EC
Following the forecast by Moody’s, even the European Commission is forecasting that the Maltese economy will not continue with the growth rhythm it experienced in recent years, although this will still be at a higher level than the average in European countries. The Commission came out with its winter forecast for all European Union countries, in which it stated that economic growth in member countries of the European block is expected to continue at a moderate pace.
Latest economic estimates released by the European Commission show that after Malta experienced a 7% growth in its Gross Domestic Product in 2018, this dropped to 4.5% last year, and it is forecasting that it will drop to 4% this year and to 3.7% next year. The economists have stated that this growth is still at a higher level than the average rate of growth in European Union countries, which is estimated at 1.4% for this year.
The Commission is forecasting that the 3.7% rate of growth of the Maltese economy will be the biggest one among the 27 member states of the European Union.
In the report on Malta, European Commission economists have noted that private consumption has moderated, although domestic consumption assisted by the increase in the working population is continuing to maintain economic growth. The economists further observed that private and public investment are still strong, although they noted that since autumn, indicators of confidence in the construction sector and services have dropped slightly. The European economists further stated that domestic consumption will continue to decrease as it will be reflecting the rate at which the economy will be increasing employment.
When presenting the European Commission forecast for all European Union countries, Commission Vice-President Valdis Dombrovskis stated indicators show that the economies of member countries will continue to grow at a moderate pace, with the average growth rate for this year estimated at 1.4%, just slightly below that of last year. The Vice-President urged European countries to take this opportunity to carry out structural reforms.
“Despite a challenging environment, the European economy remains on a steady path, with continued job creation and wage growth. But we should be mindful of potential risks on the horizon: a more volatile geopolitical landscape coupled with trade uncertainties. So Member States should use this weather window to pursue structural reforms to boost growth and productivity. Countries with high public debt should also shore up their defences by pursuing prudent fiscal policies,” Valdis Dombrovskis stated.
Commissioner for Economic Affairs Paolo Gentiloni stated that although the Brexit challenges and the coronavirus situation offer new challenges for the economy, he expressed satisfaction that the European Union is enjoying the biggest period of economic growth since the Euro started being used in 1999.