The government’s forecast of a fiscal surplus between now and 2020 has been given the green light by the Malta Fiscal Advisory Council (MFAC), which said that it fell “within its endorsable range”.

Likewise, the projected decline in the debt-to-GDP ratio, from 58.3 per cent in 2016 to 47.5 per cent by 2020, was considered to be plausible, with the council noting that both the fiscal balance and the public debt ratios were also within close range to those published by the European Commission in May 2017.

It said that total revenue and total expenditure might actually be higher than forecast, particularly on the revenue side, where the ministry applied “prudent” assumptions in the projections for current taxes on income and wealth, as well as for taxes on production and imports.

It said that spending might turn out to be higher because the projections for compensation of employees and for intermediate consumption embed a “certain element of restraint, which may be rather challenging to achieve”.

However, the higher revenue and spending risks were equal and would therefore cancel each other out.

The full report, entitled “Assessment of the Fiscal Forecasts – Update of Stability Programme 2017 – 2020”, is available on the website of the MFAC http://www.mfac.org.mt