On September 18, the Malta Fiscal Advisory Council (MFAC) presented to the Finance Minister its assessment of the annual report and half-yearly report, which were published by the Ministry for Finance, respectively in June and July this year. 

Both reports contribute positively to fiscal transparency, by providing an account of the outturn of the previous year compared to the targets and by outlining the macroeconomic and fiscal forecast updates for the current year.  

The council notes that in 2018 the outturn for nominal GDP growth exceeded again the official forecasts which had been presented in the Draft Budgetary Plan and the Update of Stability Programme. 

The council also welcomed the fact that in 2018 the fiscal surplus, when measured according to the European statistical guidelines, was larger than originally targeted, on the back of superior revenue performance overall. The council reminded of the importance of producing accurate macroeconomic forecasts and that any surplus revenue is not channelled into new unsustainable expenditure initiatives. The council noted that the macroeconomic and fiscal forecasts for 2019, which were presented by the government in its Update of Stability Programme, in April 2019, were reconfirmed. Specifically, the 2019 official forecast for real GDP growth was maintained at 6.2 per cent, while target for the fiscal surplus was reconfirmed at 0.9 per cent of GDP. These forecasts had already been considered within the endorsable range of the Fiscal Council, in its assessment report which was published in June this year.  

The council invitee the ministry to remain vigilant to ensure that the fiscal targets for 2019 are fully met, particularly in those areas where the required changes during the second half of 2019 appear more ambitious, when compared to the provisionally-estimated outturn during the first half of the year.       

The full report, entitled Assessment of the Annual Report 2018 and Half-Yearly Report 2019 published by the Ministry for Finance, is available on the MFAC website at www.mfac.org.mt.  

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