Malta defies recession but inflation soars to 5.8 per cent
The eurozone has officially plunged into recession for the first time since the euro's introduction in 2000, although Malta's head remains above the water.
Inflation on the island however hit 5.8 per cent last month, the highest in the eurozone.
Estimates published by the EU's statistical arm yesterday showed the eurozone's economy shrank by 0.2 per cent in July-September, as it did in the previous quarter. When an economy contracts for two consecutive quarters it is technically in recession.
Malta is one of the member states that has managed to defy the trend, registering positive, albeit small, growth figures.
Its economy registered a 0.7 per cent expansion in the second quarter, compared with the first quarter. Data for the third quarter are not yet available for the island but even if negative growth were to be registered there, it would still not satisfy the two-quarters-in-a-row principle.
However, the eurozone's bigger economies, which at the end of the day carry much more weight than Malta, are all floundering.
Germany's economy, Europe's biggest, contracted by 0.5 per cent in the third quarter for the second time in a row. The same happened in Italy and Ireland, while Spain recorded a first contraction in the third quarter and is expected to fall into recession by the fourth.
The scenario is completely different as regards Malta's inflation, which last month soared to 5.8 per cent, the highest in the eurozone and a staggering one percentage point over the previous month.
On the contrary, the eurozone saw inflation levels falling to 3.2 per cent last month from 3.6 per cent in September.
In view of the latest GDP and inflation figures, the European Central Bank is expected to continue cutting interest rates next month.
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lgalea
Nov 15th 2008, 23:00
J farrugia
Let's hope so but what about those thousands that although they are still working, they are only working a 4 or 3 day week or only part-time?
J farrugia
Nov 15th 2008, 13:34
Let's pray that Malta is ept this way. at least recession has not hit us. Let;'s keep positive and pray that the negatives we have in our midst see reason. Thanking God we do not have the high number of jobless that other countries have.
lgalea
Nov 15th 2008, 13:28
Eurozone to enter first ever recession
http://euobserver.com/9/27105
Note that it says Eurozone which means including Malta
Mark Grima
Nov 15th 2008, 12:37
Euro introduction in 2000????
the Euro was introduced in 1999 and 2002 as cash!!!
D.Pulis
Nov 15th 2008, 10:03
Malta stays head above the water!!! Is this a joke? Who writes these articles? Quoting the same article, Malta's economic expansion only betters the Eurozone performance by .9%. On the other hand Malta's high sustained inflation exceeds the Eurozone average by 2.6%.
It is very unlikely that the wages go up by about 6% within the next year to make up for money erosion due to inflation. In layman terms Malta is getting poorer by the minute.