Malta will register greatest economic growth in 2019 and 2020 – the EU Commission
The European Commission has once more confirmed that this year and in the coming year Malta will register the greatest economic growth among the 28 EU Member States. In its summer economic forecast the EU Commission said that Malta’s economic growth should attain the level of 5.3%, that is, three times the EU average.
The Commission’s economic analysts also forecast an economic growth of 4.8% in the coming year but on the other hand said inflation will increase by 0.1% in 2091 and 2020.
With a growth of 4.4%, Hungary and Poland are forecast to register the second largest growth, followed by Ireland and Romania at 4%. Next year, after Malta, the second largest economic growth is forecast for Romania at 3.7%, followed by Poland (3.6%), Bulgaria and Ireland (both 3.4%). The EU average growth for this year is expected to be 1.4% and 1.6% next year.
The least economic growth for this year is forecast for Italy (0.1%) and Germany (0.5%), while in the coming year Italy will remain in last place with 0.7%, below Belgium and Finland with 1.2%.
In its report on Malta, the EU Commission observed that last year the economy grew by more than 5% for the fifth successive year and said this was based on a change of economic direction based on international services. It was noted that growth in the employment sector resulted in more cash-in-hand and record private consumption. In this year’s First Quarter, domestic demand was motivated by more investment and public consumption while private consumption showed a slight decrease. Over the same period exports declined while there was a great increase in imports. Consumer confidence remained at historic levels above average but in March this sentiment began to decline, especially in the services sector.
The EU Commission said that over the next two years economic performance is expected to remain strong but will begin to moderate gradually. Public expenditure is expected to gain a greater pace than private expenditure as the Government will begin to utilise the surplus accumulated over the years.
The Commission’s Vice President, Valdis Dombrovskis, said this year and next year the whole EU economy is expected to grow, stronger growth in Central and Eastern Europe in contrast to a decreased rhythm in Germany and Italy. He warned of commercial tensions including commercial relations with the US, political instability and Brexit which in his opinion is a main risk factor if some sort of agreement is not reached.