We have a strong economy. The numbers speak for themselves. Here are a few facts: economic activity in 2023 increased by 7.5 per cent and 13.2 per cent in nominal terms. Our growth rates outpace those of the EU and the euro area. Credit agencies rate us with flying colours. This year, our economy is expected to grow further, with a real growth rate of nearly five per cent.
This is not a matter of luck. Far from it. We are small and vulnerable. We have our shortcomings too. But we are resilient. We have always been. Our history is one of resilience. When the British were about to leave, the predictions were that our economy would collapse. When the international economic situation went off the rails, the predictions were that thousands of jobs would be lost.
When the COVID-19 pandemic wreaked havoc across the world, many predicted that Malta would experience an economic crisis of unprecedented levels. When Russian tanks rolled into Ukraine, and inflation hit its highest level in decades, many braced themselves for the worst.
Of course, none of the above occasions were a walk in the park. But the government stepped in, saved jobs, paid the wages, rolled out water, electricity and fuel subsidies, widened the tax band,; increased pensions and children’s allowances and introduced a scheme, aptly called Stabbilità (stability), that cushioned what could have been the catastrophic effects of raging inflation.
And amid these challenging situations, for Malta, and chaos in many member states, our economy grew, tourism boomed, thousands of new jobs were created and exports increased substantially.
Yet, we can not rest on our laurels. We must plan forward, set ambitious targets and ensure that we achieve them. Budget 2025 will do just that. The indications are there: further economic growth; no new taxes; the widening of income tax bands (so that people pay less taxes); a better infrastructure; subsidies will remain; more and better paid jobs will be created.
But diversification is essential to future-proof Malta’s economy. To remain competitive, we must diversify. What worked well yesterday and gave us the economic results that we are all proud of might not work tomorrow. To remain resilient to external shocks, a diversified economy is a must.
2025 and beyond will be the year when stronger investment will be made in renewable energy, digital innovation and green technology. In parallel, we will transform our educational system into one that supports this change – an educated and skilled workforce is key if we want to succeed.
To remain resilient to external shocks, a diversified economy is a must- Stefan Zrinzo Azzopardi
The government’s labour migration policies are being revisited. The aim is to align migration with the actual needs of the labour market.
Tourism will remain pivotal for a booming economy. Going forward, we will focus more intensely on sustainable tourism by attracting higher-quality tourists.
Greener spaces and lower carbon emissions are a must. The progression towards transport electrification has started and will intensify. Government financial support to cover part of the costs of roof insulation, air-to-water heat pump systems and solar water heaters will be sustained.
The importance of the property sector for our economy cannot be understated. On the other hand, given our geographical size, it must constantly adapt itself to today’s and tomorrow’s realities. Facilitating property transactions is highly necessary. We shall invest in a strategic way forward to achieve this important change for the benefit of all property owners and potential buyers.
These are major changes. None of this can happen without a strong economy. But our economic track record speaks for itself. Our plan is clear: to create wealth and ensure that it is fairly distributed; to diversify our economy for more and better paid and highly skilled jobs; a cleaner environment; better energy efficiency; providing our families and businesses with the appropriate conditions to prosper.
2025 will be a socially just budget. We shall achieve this together, with peace of mind and stability as our foundation.
Stefan Zrinzo Azzopardi is Minister for Lands and the Implementation of the Electoral Programme.