At the end of September, the Malta Fiscal Advisory Council (MFAC) published and presented its overall assessment of the Maltese Government's fiscal strategy and performance to the Minister of Finance. The Council was established by the Minister of Finance himself in order to examine and keep track whether the government's fiscal and economic objectives are being achieved and make suggestions.
The report, entitled "An Assessment of the Medium Term Fiscal Strategy 2015-2018, Annual Report 2014, and Half Yearly Report 2015" stated that government has performed positively with regards the requirements of the 2014 Fiscal Responsibility Act. The fiscal deficit and public debt to GDP ratios were largely met, enabling the EU's Excessive Deficit Procedure to be lifted. However, while Malta's high economic growth rate will help further stabilise the country's economic situation, the government can hardly afford any slippages from its fiscal targets.
International rating agencies such as Standard & Poor's and DBRS have also outlined this point. Both agencies recently awarded and confirmed Malta's economy with an 'A' rating and classified it as stable, however warned that failure to achieve fiscal goals will prove to be a setback.
Other suggestions that were made by the MFAC in the report were increased transparency in the government's fiscal reports, increased expenditure rationalisation in order to plan ahead and address long-term challenges more effectively, as well as creating initiatives that are aimed at incentivising work and addressing human capital.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.