Malta’s economy is expected to continue to perform positively in the next two years and in some areas even better than the EU average, according to the latest economic forecasts published this morning in Brussels.
According to the European Commission, job creation will out-perform euro area peers while the favourable macro-economic outlook is set to result in a further decline in the budget deficit.
According to the Commission, which analyses the past performance of the EU member states and projects a two-year forecast, Malta’s GDP in 2014 hit the highest growth rate since 2010 and is expected to accelerate slightly to 3.6 per cent this year.
However, the Commission points out that delays in the energy investment projects, particularly the gas-fired power plant which has already fallen behind schedule, may result in lower than expected economic growth.
Employment growth is also projected to continue to increase while unemployment falls.
With regards to public finance, the Commission said the deficit is expected to continue to fall to 1.8 per cent this year and to 1.5 per cent in 2016, on a no-policy-change assumption.
The island’s debt is also expected to fall to 64.4 per cent of GDP by 2016.
The Commission said that the downside risks to this projection are linked to higher-than-expected subsidies to Malta’s new public transport service provider.
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