IMF projects strong outlook for Malta’s economy

The International Monetary Fund (IMF) projects a strong outlook for the Maltese economy, with economic growth expected to remain solid in 2016 and 2017. It also notes the robust economic growth that has beenrecorded by the country’s economy, helped by policy initiatives and supported by vibrant domestic demand, large infrastructure projects, and a stable banking sector.




In its Staff Report for the 2015 Article IV Consultation, released on Wednesday 20th January 2016, the IMF remarked that growth in this year and the next will be initially driven by domestic demand and then by a gradual recovery of external demand. The Fund also expects the risks to this positive outlook to be balanced and the current account surplus expected to remain.




Under Article IV of the IMF’s Articles of Agreement, the international organisation holds regular bilateral discussions with its member countries, followed by a Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration. An IMF team was in Malta for discussions with representatives of the Maltese government towards the end of 2015.

The IMF report acknowledged that unemployment in Malta is at historical lows and that labour participation is increasing. It also noted that measures to enhance female participation are paying off and supporting potential growth, and pointed out the action taken by the Government on multiple fronts, including the judicial and the energy sectors.



On the fiscal front, the IMF noted the Government’s success in reducing the fiscal deficit and debt and on its progress on the restructuring of state-owned enterprises. It views the pension measures, introduced in theBudget 2016 aimed at addressing both the adequacy and sustainability of the pension system, as steps in the right direction. The IMF also noted how ongoing efforts to improve access to credit such as the NPL resolution, judicial reforms, the planned credit registry and the multi trading facility by the stock exchange will improve growth financing.



Minister for Finance Edward Scicluna, commented: “The Government is pleased to note that its efforts to continue strengthening the country’s fiscal governance are in line with the IMF’s recommendations. We take note of the IMF’s recommendation to take policy actions in the financial sector so as to continue strengthening the resilience of banks. We will also continue directing efforts towards raising potential output and thus increasing the productive capacity of the Maltese economy.”


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– 21st January, 2016


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