No economic updates from government

The Ministry of Finance will not issue updated economic predictions despite the latest figures that showed how the recession continued to bite harder in the first three months of the year.

A spokesman for the ministry also said that it would not issue updated projections of government revenue and expenditure, which are expected to be very different from those announced when the budget was presented in November.

"There are the European Commission's regularly updated figures. In the process of drawing these up, the Commission consults the ministry. Moreover, we have not disputed any figure published by the Commission," the spokesman said.

The most recent forecasts by the Commission last month predicted that the economy would contract by 0.9 per cent in 2009. The government's budget growth forecast had been of 2.5 per cent. It has not officially revised its forecasts.

The National Statistics Office confirmed last week that the economy shrunk by 3.3 per cent between January and March when compared to the same period last year.

It also confirmed that the economy has remained in negative territory for nine consecutive months after officially going into recession during the second half of 2008. Economic growth for the whole of 2008 reached 1.6 per cent but the economy contracted in real terms in the third and fourth quarters by 0.3 per cent and one per cent respectively.

The NSO statistics followed another forecast by the European Central Bank that the eurozone economy could shrink by more than five per cent this year.

The latest GDP figure for Malta makes it more likely that there will be a revision of the economic growth forecast for this year. Two weeks ago the Central Bank of Malta told The Times Business that it was likely to further revise downwards Malta's economic growth projections for 2009.

The government has adopted a micro-approach to the country's recession, focusing on the individual needs of manufacturing companies and providing them with financial aid for re-training and new production lines. In the process it has enabled a number of factories to revert to a five day week and saved almost 2,000 employees from being made redundant.

ksansone@timesofmalta.com