Malta becoming ‘dangerously expensive’

With the second highest inflation rate in the eurozone, Malta is sending out a message that it is “dangerously expensive,” according to Opposition Leader Joseph Muscat.

The increase in the cost of living was restricting purchasing power and affecting the tourism industry, he said, urging more focus on the issue.

He said a vicious circle was being formed by businesses surviving on credit given by other businesses, restricting cash flow and profitability. In the long term, this would affect sustainability.

He was speaking at a conference organised by the auditing firm KPMG last Friday. Speaking about the financial services sector, Dr Muscat said both parties should work together to help it grow, without being divided by politics.

However, he called on the financial authority to reduce the red tape and cut down on costs to help businesses grow and become more competitive.

More students were turning to the financial sector, Dr Muscat said, stressing that the University should specialise more in the subject.

FinanceMalta, the partnership between the government and the financial sector, for example, did not have the required resources to fulfil its task to promote Malta as centre of excellence while Islamic banking was also another market that offered a huge potential that had to be tapped into.

However, strong political will and investment was necessary, he said.

The Prime Minister, who also spoke at the conference, said Malta’s financial sector boomed in the past five years with a 300 per cent increase in investment funds, despite the current global crisis.

In fact, the sector grew by four per cent while investment services companies increased by 40 per cent in the past five years.

Addressing the issue of red tape, especially for small companies, Dr Gonzi said the Malta Financial Services Authority was reviewing the Companies Act to make the law simpler.

The Prime Minister generally had a positive outlook on the country’s employment sector with 6,000 job vacancies filled at the employment corporation between January and September and an increase of 2,000 women in full- and part-time jobs.

Plus, 80 companies invested after benefiting from around €12 million provided by Malta Enterprise while another 70 companies ventured into new markets.