IMF praises Malta but seeks further reforms
The International Monetary Fund in a report on Malta, issued late yesterday, praised the country for weathered the recession well while noting some risks in the financial sector due to dependence on the property sector, which has been slowing down.
The executive directors said the economy is now showing signs of a robust cyclical upswing. The challenge ahead, they said, would be to achieve strong and sustainable growth, something which would require strategic fiscal consolidation and prudent risk management. Continued progress with structural reforms was also important to establish high value exports and to raise productivity and employment rates.
"Malta weathered the global recession relatively well. Output fell less than the euro area average and unemployment rose only modestly, partly reflecting government support," the IMF noted.
"Driven by external demand, a cyclical upswing is now underway and manufacturing and tourism activity, hit hard by the global recession, have recovered with the latter near pre-crisis record levels. However, the recovery is not yet broad based and some sectors, including construction and retail, are lagging.
"On the back of softer real estate prices, elevated unemployment, and higher uncertainty about job prospects, consumption growth slowed but has been supported by very low interest rates. Investment, especially in construction, decelerated sharply and remains sluggish. Inflation has picked up as the ongoing rebound allows firms to rebuild profit margins and pass on higher energy prices, but underlying inflation is expected to remain contained," the Fund said
"The Maltese banking sector has weathered the global financial crisis relatively well, but vulnerabilities are rising. Relatively conservative funding models and little exposure to U.S. toxic assets have kept spillovers from the global financial crisis to banks in Malta at bay.
"However, a long real estate boom contributed to a significant increase in private sector debt and as a result domestic credit risk. Real estate prices and collateral values experienced some correction and appear to have stabilized more recently, but excess supply likely remains in segments of the market. Household debt has grown rapidly but still remains somewhat below the euro area average. Non-financial corporate sector debt has risen to elevated levels, with a significant share of debt incurred by the construction and real estate sectors. Banks have tightened lending policies and bank credit growth has decelerated but remains strong compared to the euro area average. In parts of the banking sector the growing exposure to debt securities, including to euro-area peripherals currently under stress, poses additional risk."
Executive Board Assessment
The directors said they endorsed the the government’s ambitious fiscal consolidation plans in response to the increase of public debt and guarantees and implicit liabilities to relatively high levels. They noted that although fiscal deficits have remained contained, a more rigorous approach that spells out specific measures underpinning priorities for the next budget will raise the credibility of adjustment plans.
Directors noted that Malta’s financial sector showed resilience during the global crisis. However, high credit risk following a long real estate boom and the large exposure of a few banks to foreign securities, including to euro-area peripherals currently under stress, warranted heightened vigilance and determined supervisory action. This included encouraging banks to strengthen their capital buffers, preferably through equity injections and retained earnings.
Directors agreed that further structural reforms will be critical for increasing Malta’s competitiveness, productivity and attractiveness to foreign direct investments. Measures to enhance the education system and encourage women and older workers to participate in the labor market will be important to raise employment. Further liberalization of the regulated sectors would boost economic efficiency.
See official report summary by clicking the pdf below
Attached files
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Gianninu Saliba
Jan 30th 2011, 10:05
Oh Joseph, this is your 215 bubble that burst. Every time you open your big mouth, some international organization tells you in on uncertain terms: "Joseph, you are wrong again. The P.N. Government is doing a marvelous job".
Clive
Jan 29th 2011, 21:49
The IMF will destroy Malta. Listen this audio from researchers in the United StatesL
http://www.talkshoe.com/talkshoe/web/audioPop.jsp?episodeId=445143&cmd=apop
Also for your education see this information:
http://www.unitypublishing.com/Government/IMF.htm
C Galea
Jan 29th 2011, 19:12
Iz-zejt jitla f'wicc l-ilma jghid il-Malti. Inutli tal=PL ipengu kollox ikrah u hazin. Infaqet buzzieqa ohra. Din tal-IMF inziduha mal tal=Credit Raters, ma tal-EU u mall-esperti l-ohra kollha li m'humiex 'biased' bil-partiggjanizmu Malti. Ghad isir zball fil-futur qarib u imbaghad inharsu lura u nghidu 'kemm konna ahjar meta.....'
Keep it up Blues.
Joseph E Briffa
Jan 29th 2011, 16:36
Din l-espressjoni tal-middle class gejja mil Labour party u l-gazzetti taghhom. Min juza' din l-espressjoni qed jikxef lilu nnifsu u qed jirrepeti x'qal haddiehor. Jien m'ghandi minn hadd imma li xi nies jitfghu kummenti biex ikunu qalu x'haga ma taghmilx sens ghalija. Jien insaqsi lil dawn in-nies jekk kemm hemm verita' f'dak li qed jghidu. Insaqsi wkoll x'qed jaghmlu biex itejbu l-pozizjoni finanzjarja taghhom; qeghdin jistudjaw biex izidu l-kwalifiki taghhom, jekk huma unskilled qeghdin jittrenjaw biex isiru skilled u jbiddlu x-xoghol taghhom:. Il-gvern qed joffri skema ghal dan il-ghan, qeghdin nippartecipaw f'din l-iskema? Bi tgergir biss qatt ma naslu mkien. Naf li zminijiet mhumiex tajbin u ghad iridu jigu zminijiet aghar, ghalhekk irridu nghinu lilna nfusna u mhux nistennew biss li l-gvernijiet jghinu.. Ghandna hafna beneficcji socjali Malta izda dawn mhumiex ser ikomplu jitjiebu anzi pjuttost li jkollhom jitnaqqsu. Naraw dan t-tnaqqis fl-Izvezja, l-Irlanda, l-Ingilterra, Spanja, Grecja...The times of the socialist doctrine to look after the people from the cradle to the grave are well past and they will not be with us again for quite a long while. Everyone must help themselves, otherwise we'll go under.
john borg
Jan 29th 2011, 16:12
The comments by Labourites are always the same. Whenever a report praises what's being done, they ask for more. Why doesn't labourites speak about the tax evasion by self employed, most of which are labourites, and who constantly grumble after avoiding to pay what's due? i wish an MP would ask a question in parliament to see how much money the self employed declare they earn. All the BMW's, new cars on the roads and boats in the marinas are here because of the new sign of poverty. A country with 3 cars per family and more mobile phones than people and we speak of poverty. When labour will be in government, everybody will know what poverty means.
john borg
Jan 29th 2011, 16:12
The comments by Labourites are always the same. Whenever a report praises what's being done, they ask for more. Why doesn't labourites speak about the tax evasion by self employed, most of which are labourites, and who constantly grumble after avoiding to pay what's due? i wish an MP would ask a question in parliament to see how much money the self employed declare they earn. All the BMW's, new cars on the roads and boats in the marinas are here because of the new sign of poverty. A country with 3 cars per family and more mobile phones than people and we speak of poverty. When labour will be in government, everybody will know what poverty means.
Charles Massa
Jan 29th 2011, 15:28
Mela la sejrin daqs hekk tajjeb , imissu l gvern inaqqas l income tax, il kont ta dawl u ilma u izid il pagi ghax hekk kien wieghed qabel l ahhar elezzjoni. Dan tal IMF paroli fil vojt. Ghax ma jarawx il faqar li rega fegg hawn Malta.
Manuela Grima
Jan 29th 2011, 17:18
Charles,
La qed tghid hekk turi li qas biss qrajt, mhux ir-rapport ta, imma l-artiklu tat-Times hawn fuq.
Il-konkluzjoni tal-IMF hi din (copy and paste)
"....although fiscal deficits have remained contained, a more rigorous approach that ..... will raise the credibility of adjustment plans."
Fi ftit kliem lil Gvern qed tghidlu (dwar id-deficit):
Prosit, mixi fit-triq it-tajba, imma trid tkompli taghmel iktar ghax mhux bizzejjed, trid tnizzel id-deficit aktar.
Mela jnaqqas l-income tax!!
(Aparti, sinjal tajjeb li tixtiequ jnaqqas l-income tax. Il-weghda tal income tax se taffettwa dawk li jaqbzu l-25,000 ewro fis-sena. La tinteressak, jidher li ghandek dak is-salarju. Prosit.
Dwar li paroli fil-vojt, ovvjament, l-argument tipiku Laburist. Rapporti bhal dawn huma l-aqwa ghodda ghall-investitur. L-investitur barrani ma jinteressahx li Gonzi jghidlu "Ejja Malta ghax sejrin tajjeb". L-investitur parir indipendenti. Parir li f kazi ta pajjizi ohra jghid "Sejrin hazin". U tara kif jitgerrex l-investitur b rapport bhal dak.
Imma ghal-Labour, la ma jghoddx ghal widnejhom, "paroli fil-vojt"
Denis Pace
Jan 29th 2011, 20:07
Mela ma qrajtx ir-rapport....FISCAL CONSOLIDATION....Dak li tixtieq jasal meta jkun il-waqt.
Nehhu dak l-imbierek ghamad minn fuq ghajnejkom u tghallmu araw u aqraw x'qed isir fid-dinja ta'madwarna. Jekk taraw biss il-ONRE, qed tghixu f'dinja ohra
Phil Pryce
Jan 29th 2011, 15:00
Yes, well done in deed. The fat cats are getting fatter. The term 'pay rise' does not seem to be in the dictionary used in Malta. I hear people saying they have not had a pay rise in the last 7 years, and one or two quoted 9 years. How long can this continue? It went on for a long time in places like Tunisia, until the people decided they had had enough!!
Rosette Scicluna
Jan 29th 2011, 12:54
Mela s-sitwazzjoni hi din.
Il-Gvern jghid li l-pajjiz sejjer tajjeb, l-ekonomija mixja l-quddiem, ix-xoghol qed jizdied u l-finanzi mexjin fit-triq it-tajba. Pero l-Gvern ovvjament se jitkellem tajjeb.
L-Oppozzjoni tghid li l-pajjiz sejjer hazin u l-ekonomija sejra lura, in-nies bla xoghol u l-finanzi dizastru. Pero ovvjament l-Oppozizzjoni se titkellem hazin.
Imma issa, ghandna l-akbar istituzzjoni finanzjarja fid-dinja, li qed tfahhar l-ekonomija ta pajjizna.
Mela lil min se nemmnu issa!!
L-'unsung hero' fdan kollu huwa Tonio Fenech, ministru li kultant jaghmel aktar hoss ghal xi kumment fuq il-maid, imma li filfatt huwa l-akbar responsabbli biex salvana mill-aghar ricessjoni fl-ahhar 100 sena. M ghandi xejn minghand hadd imma zgur li grazzi ghal dan ir-ragel li eluf ta haddiema tal-ST, methode trelleborg, toly u hafna aktar ma tilfux il-post tax-xoghol taghhom.
C Camilleri
Jan 29th 2011, 13:19
Taf xhin nemmen Rosette Scicluna - x'hin nibda nhoss li buti u but in-nies middle class sejjer tajjeb. Sa issa taf x'inhoss f'buti? Li ma nistax inlahhaq mal-hajja!
V.Mangion
Jan 29th 2011, 13:56
While this is good news you should first read the report in depth to see where there are signs that things are not going well also.
Regarding saving jobs, I think the merit goes to the employees who were ready to make sacrifices (lesser wages, 4-day week, no promotions, no bonuses, no overtime) to save their job. Tonio did what every elected person is entrusted by our vote to do, nothing more, nothing less.
By the way, he got a 500 Euro raise, while I only got 1.16 Euro.
R Saliba
Jan 29th 2011, 14:17
C. Camilleri, can you please tell us what 'middle class' means to you? Cos the PL always mentions this 'middle class' and i have no idea what benchmark it uses. Maybe you could give us an idea (ie. if you are not quoting the PL innunendo)
jbusuttil
Jan 29th 2011, 14:48
@C.Cammileri.
Ahsab kif sejjer ihossu il-but tieghek taht il-Labour meta nibdew nisimghu bil-hofra
A. Scerri
Jan 29th 2011, 16:27
@ V. Mangion
kif dardartuni sejrin bil 1.16 euro! kull ma jigri tajjeb tarawh hazin.. ma ntikomx trod imma ghax jekk toqod tisma one tv idahluwilek go rasek li ed tejx l infern
Joseph Cauchi
Jan 29th 2011, 12:48
"Malta weathered the global recession relatively well. Output fell less than the euro area average and unemployment rose only modestly, partly reflecting government support," the IMF noted.
Well done to our Government!
Other comments are superfluous.
JC.