Government 'superficial' in its analysis on economy

Labour's spokesman for the economy and the self-employed, Gavin Gulia, yesterday accused the government of being superficial in its analysis of economic growth.

The government boasted that the economy was expanding at the rate of 3.5 per cent despite the dire international situation.

But Finance Minister Tonio Fenech was simply quoting GDP figures without explaining what was behind the economic expansion and who was benefiting, said Dr Gulia.

He argued that if one considered the expansion from the point of view of expenditure, one would find that 2.5 percentage points from the 3.5 per cent was derived from government consumption.

This meant that 70 per cent of the expansion was the result of a strong increase in government recurrent expenditure.

This, Dr Gulia said, confirmed that the Labour Party was right to express concern in recent days over the financial situation and the government's missed targets to control recurrent expenditure.

Even from the production side, more than a quarter of the economic expansion is coming from a heavy increase in expenditure on wages in public administration and in the health and education departments because of promotions and an increase in recruitment before the general election, he maintained.

He pointed out that according to a survey for the Industrial Confidence Indicator for Malta published by Eurostat, the feeling among entrepreneurs who operate from Malta in the manufacturing sector has become substantially negative.