Growth forecast to be lowered by Central Bank

The Central Bank is expected to revise downwards its economic growth projections for Malta, Central Bank Governor Michael Bonello told Reuters in an interview.

Mr Bonello said the original projections were in the region of 2.5 per cent but this was established at the end of 2008. Now, he said, the Central Bank had a clearer picture of what was happening and would be revising the projection downwards. Although the exact figure would be announced next month, Mr Bonello said it was likely to show slight positive growth.

"This is a very small economy and therefore even relatively small changes over the course of the year can have an impact one way or the other," he said.

"Tourism is the key I think because it has got a big multiplier effect. So far, January and February have been down on last year, which was a record year. Capacity on airlines has been reduced but there are some new routes opening up in April, so if we manage to compensate from April onwards then that might help stabilise things.

According to figures published by the National Statistics Office, while economic growth for the whole of 2008 reached 1.6 per cent, the economy contracted in real terms in the third and fourth quarters after registering growth in the first half of the year.