Government in denial over economy - PL

Labour MP Gavin Gulia has accused the Prime Minister and the Finance Minister of denying the effect of the global financial crisis on the local economy.

The government, he said, was repeating the same mistake it made when it guaranteed job security for ST Microelectronics workers, only to be contradicted by the company within 24 hours.

As usual, he insisted, the government was ignoring the writing on the wall. It was acting as though it needed to do nothing more than it did in November's budget to counter the effects of this unprecedented crisis.

He referred to the latest official statistics which show that exports slid 20 per cent during the last quarter of 2008 when compared to the same period the preceding year, down from another drop of 8.4 per cent in the previous quarter.

The export slump in 2008 was not only attributable to ST and manufacturing sectors but was spread over various industries, he said.

In fact, while the government continuously boasted about foreign investment, the same statistics showed that capital goods investment - which is an indicator of investment in machinery for production - in the last quarter of 2008 collapsed by almost 50 per cent or €92 million.