Central Bank lowers growth projections

The Central Bank is revising its economic growth projections.

Bank Governor Michael C. Bonello told the House Public Accounts Committee yesterday that although the assessment was not expected to be completed before the first week of December, it looked like GDP next year will be two per cent.

GDP growth was three per cent this year and the government in the Budget speech on November 3 projected growth of 2.5 per cent for next year.

Mr Bonello acknowledged that economic forecasting was difficult in the current international economic scenario, saying much depended on external demand.

He welcomed the fact that the main banks had given preferential interest rates on mortgages, adding that the rate of mortgage and credit card repayments in Malta had remained regular.

Mr Bonello said that the direct effects of the situation on Malta were limited.

However, there was no room for complacency.

The banking sector was small and highly concentrated and it was heavily exposed to the construction and property sectors. Moreover, the indirect effects from the recession abroad could not be excluded.