Maltese households registered the biggest drop in consumption spending in the EU from 2019 to 2020, according to Eurostat figures.

Consumption spending went down by 22% – more than double the EU average of 8% and the largest annual decline recorded, the EU statistics show. 

The unprecedented drop was due to the effects of the COVID-19 pandemic, the EU's statistical office stated.

The severity of the impact of COVID-19 varied between countries, with Croatia, Spain and Greece, all following Malta with household consumption dropping by around 16%.

Apart from Malta, eleven other member states saw consumption fall by more than the EU average. 

The smallest declines were observed in Slovakia and Denmark, followed by Lithuania and Poland, all hovering between 2-3%. 

Eurostat defines consumption expenditure as “what people, acting either individually or collectively, spend on goods and services to satisfy their needs and wants.” 

It notes that consumption expenditure can be a way of measuring economic well-being, as the more people can consume the higher their level of economic well-being, though it also notes that “the relationship between the two is not a linear one.” 

Where did consumption fall?

According to the data, ‘Household expenditure: changes in the EU Member States’, released earlier this week, social-distancing measures, government restrictions imposed on the movement of people and non-essential economic activities all severely affected spending. 

Restaurants and hotels in the EU were most “sharply” hit in 2020, with household consumption expenditure for this category falling by 37.8 % of total expenditure.

Spending on clothing and footwear was down by 17.3 %, followed closed by transport, recreation and culture, when compared to 2019.

Malta also recorded the lowest levels of spending on 'housing, water, electricity, gas and other fuels' – 16.8 % – together with Lithuania and Cyprus, while the highest were observed in Slovakia, whose expenditure on such items doubled.

In Malta, electricity prices are controlled by the government, unlike most other countries which operate a free market system. 

PN: People are feeling the pinch

Commenting on the statistics, PN spokesman Peter Agius, an EU expert and former MEP candidate, highlighted that Maltese families were feeling the “economic pinch” the most.

“Meanwhile, the government, instead of helping them, spends money haphazardly on ‘positions of trust’ and corrupt contracts,” Agius said.

He questioned whether this information would make it to the national broadcaster’s news bulletin.