The Malta Chamber welcomes the solid performance reported in the European Commission's Economic Winter Forecast published on the 4th of February. The report reconfirms what the International Monetary Fund just stated towards the end of January.
In the report the Commission reports that growth is forecast to maintain a growth trend over 2016 and 2017 with Real GDP growing at 4.9% last year decreasing to 3.9% this year and 3.4% in 2017. The main engine of growth remained investment especially machinery and equipment investment related to the Power Station extension project at Delimara and private consumption due to strong wage growth and record-low unemployment.
The Malta Chamber nevertheless, contends the need to address the issues with the slowdown of export-led growth and the need to make our country's proposition more attractive to foreign investors. Therefore the Chamber maintains the need for the country to continue on its economic reform path and remain cost competitive.
Unemployment is set to remain low over the forecast horizon with a rate of 5.4% whilst inflation is set to increase and return above the 2% mark after 2017. Indeed inflation is forecast to be among the highest in the Euro area over the next years.
With regards to Public finances, the Commission reports a very healthy state as it is forecasting a deficit rate of 1.6% for 2015, further reducing to 1% by 2017. At the same time, it is also reporting that debt will also decrease substantially from 67% in 2014 to 58.7% of GDP by 2017.
Download the Malta country forecast here
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