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Cost of living creating economic and social problems - PL

The high cost of living in Malta was creating several social and economic problems lowering the people's standard of living, PL spokesman Charles Mangion said.

In a statement, he said that the latest statistics confirmed that the cost of living in Malta on a 12-month average was the highest in the EU and three times the euro zone average.

He said that excessive inflation reduced competitiveness because it led to unions and workers requesting wage increases. It also led to civil servants requesting increases, pushing up the government's recurrent expenditure without increasing production.

Dr Mangion said that while Malta's economy compared well to that of Cyprus - a similar open economy, between January and September last year, instead of moving closer to the euro zone average, as was done by Cyprus, the inflation difference between Malta and the euro zone average increased to around three percent after September.

Dr Mangion pointed out that inflation was highest on essential items such as food, energy, health services and education.

The main contributor to this higher inflation was the Prime Minister's decision to increase water and electricity tariffs to rates which did not reflect the international cost of oil.

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