Ivan Camilleri, Brussels
Malta grows fastest in eurozone
‘Economy can withstand this crisis’
Malta’s economy powered ahead in the second quarter, recording the fastest growth in the eurozone at 2.8 per cent.
By contrast, at 0.2 per cent, growth for the whole of the euro area has nearly stalled, compared to 0.8 per cent in the first quarter. In the first three months Malta’s economy had grown by 0.7 per cent. The figures emerged from new data issued by Eurostat in Brussels and the National Statistics Office in Valletta, yesterday.
They come just a day after Moody’s downgraded Malta’s bond ratings by one notch citing the likelihood of medium-term growth coming in at under the previous figure of over three per cent as a result of the global recession.
According to Eurostat, Malta’s GDP growth between April and June was the highest among the members of the eurozone.
Worryingly for Malta, though, the performance of some member states seems to be pointing towards difficult times ahead for the European economy.
Germany and France, the two biggest economies, performed badly, with Berlin reporting growth of just 0.1 per cent (1.3 per cent in Q1) and France at a standstill – 0 per cent (0.9 per cent in Q1).
Italy registered 0.3 per cent and the other of Malta’s main trading partners, the UK, also performed poorly at 0.2 per cent.
An EU official observed that, while Malta’s economy was growing steadily, particularly when compared to 2010, the eurozone was showing signs of weakness.
“This will have a negative effect on all the eurozone at the end of the day,” the official warned.
“Malta depends on the other European markets for its exports, tourism and services, and negative economic news in the rest of the euro area may eventually mean negative news for Malta’s economic growth prospects.”
According to the NSO, Malta’s GDP between March and June reached €1.6 billion, with growth registered across all the main economic activities except financial and insurance activities, construction and electricity, gas and water supply.
Reacting to the figures, Finance Minister Tonio Fenech said they showed Malta’s economic policy was on the right track and that despite the international difficulties Malta was managing to grow at a steady pace.
He said decisions made by the government to boost the economy had resulted in a 50 per cent rise in exports this year and an unemployment level of just 6.3 per cent.
The minister also reacted to Moody’s downgrade of Malta’s foreign and local currency government bond ratings from A1 to A2 and its revision of outlook to negative.
He said that while it understood the decision, the government was disappointed by it.
“The agency emphasised that the reclassification was not for lack of effort by Malta to address the economic crisis. Rather, Moody’s said Malta dealt with the 2009 crisis well and the impact was small. But because of what is happening in the rest of the world and because our economy is small and open, there will be an impact on Malta’s economy,” Mr Fenech said.
“We should not be disheartened. As the report said, our economy is strong and can withstand this crisis. Moody’s is also confident that Malta can deal with a second round crisis,” he added.
Labour leader Joseph Muscat described the downgrade as a matter of concern but said it came as no surprise to Maltese families, who had long been struggling to make ends meet even as the government claimed the economy was improving.
“We expect honesty regarding the true situation of government finances,” he said. Both the European Commission and the European Central Bank declined to comment on Malta’s downgrade.
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Geoffrey Pace
Sep 9th 2011, 11:37
Gonzi has been issueing bonds since 2003. Most of them are long-term bonds and will mature in about 10 years. The country then needs to redeem that debt.
Recent bonds will hopefully mature later but it will be difficult to keep on issueing bonds that do not attract sufficient interest in the short term. Then the same crisis that hit Greece will happen here.
We need to increase producivity, cut down on wasted holidays, just keep national days, like 1 January, 10 February, Good Friday, 29 June, 15 August, 8 September, 8 December and Christmas Day. Some holidays are just bizarre like 7 June.
Anthony Pace
Sep 9th 2011, 07:25
We need to cut out the extra public holidays in our work year like 19 March, 7 June, 21 September, 13 December. Too many holidays to conentrate on generating extra work. Let's just keep the one that matter to the Catholic faith.
VINCENT WILLIAMS
Sep 8th 2011, 21:54
According to a German Tink Tank Malta IS ALREADY on the path of Greece, Spain, Italy and Cyprus. The negative outlook given by Moody's confirm this. The big problem is RIGHT NOW not two years from now. GonziPN has to SOLVE it RIGHT NOW. The Government can hide it as much as possible as he has been doing for many years. A future Labour Government can diccover more details of the bad situation just one month after he will be elected. That will clearly shows that the financial disaster was created by Nationalist Administrations during these last years and not created by a Labour Administration just after one month from gaining power.
Charles Vella
Sep 8th 2011, 15:35
@anthony pace
You are right... we will be after Cyprus, Greece, Spain... and yes, Malta will be in the news again, not becuase of the good things Malta did and was praised for, and for the good economy we currently have, and the good life we are currently enjoying...
But Malta will be in the news right after joseph muscat will be Prime Minister and lejber will be in government, then yes... we WILL be in the news, naturally with the headline 'Malta needing bail out'
How I wish for lejber to win the next election and see this happening, NOT becuase I wish the worst for Malta, because I am Maltese, today I am proud to be Maltese, and I love MALTA... However some people need to learn the hard way... so yes, vote MLP/PL and let's be in the news 'MALTA NEEDING BAIL OUT' With the way the lejber is doing it's stuff, there is where it will lead... children belong in school NOT being Prim Ministers! ...wait and see! (and obviosly, the past speaks for it's self... seeing previous ljeber Prime Ministers, they only brought shame to us Maltese citizens... with the last one stopping Maltas economy, freezing Malta's application to join the EU and MOREEEEEEE... MUCH MUCH MORE ...and with lejber in government, the same will happen!
Oh well... we are a democracy... but I have LOGIC, and I use LOGIC not passion!
Peter Xuereb
Sep 8th 2011, 21:12
Learn to spell Labour if you wish to be taken seriously
Anthony Pace
Sep 8th 2011, 12:22
We will soon be the next after Cyprus needing a bail out with heavy debt and the taxes needed to service our debt. Moody's was right - our credit rating is fast slipping. Let's hope this lot can allow us to decide who can run the country soon.
Mr B. Fenech
Sep 8th 2011, 14:49
Your Are living in a fish bowl. You are right we will be after Cyprus, just wait till labor take power.
Mr Peter Murray
Sep 8th 2011, 11:09
Put the figures when washed on the Full Spin cycle why don't you-and don't take any notice of actualities or the truth .I suppose Moody's were not privy to these revelations before reducing Malta's credit rating?Get real please as despite populist opinion your can't fool all the people all of the time!
Joe Gatt
Sep 8th 2011, 10:59
Incredible achievments indeed and quite impressive, considering, todays turbulent & unsettling times.
This could be a way out of the whole mess.
Perhaps Europe`s should follow and copy what we are doing? To save their Day?
Just asking.
VINCENT WILLIAMS
Sep 8th 2011, 10:40
So, if according to Mr. Ivan Camilleri 'Malta grows is the fastest in Eurozone'. Than what is keeping the UHM to demands a wage rise of €27.95 (that is LM12) like UHM demanded during a Labour Administration?
The €500 weekly rise that the Ministers and the Parliamentary Segretaries had is it because 'Malta grows is the fastest in Eurozone'? But than on the other hand why the common people had only a wage rise of €1. 50 when 'Malta grows is the fastest in Eurozone.'?
Why 'Moody' gave us a negative outlook if 'Malta grows is the fastest in Eurozone'? Why than we still have many bad roads and bad pedestrians, the lowest wages in the E.U., one of the most taxed country in the E.U. if 'Malta grows is the fastest in Eurozone'?
Alfred E. Zahra
Sep 8th 2011, 15:24
Read and at least try to understand Moody's report for you questions to be answered. However from your questions you give the impression that you do not want to enlighten yourself.
Mr Joseph Aquilina
Sep 8th 2011, 10:28
"Labour leader Joseph Muscat described the downgrade as a matter of concern but said it came as no surprise to Maltese families, who had long been struggling to make ends meet even as the government claimed the economy was improving"
And this is how someone like Joseph Muscat shows us he understands practically nothing about economy. He did not even realise the WHY Malta has been downgraded!!
Mr Jo Camm
Sep 8th 2011, 11:39
"Joseph Muscat shows us he understands practically nothing about economy" Why should he understand?? His only concern is to beome Malta's Prime Minister as soon as possible - by hook or by tooth.
Martin Cole
Sep 8th 2011, 09:13
Predicted government in opposition comment: "It's not good enough to be first in Europe for relative growth!"
Peter Gatt
Sep 8th 2011, 09:13
A 2.8% growth is admirable and great news for Malta. It shows that the Maltese are diligent, hardworking and competent people. It is time that local politicians realised that too because they seem to have greater faith in foreign executives than local ones. Such a high rate of growth amongst floundering EU economies begs the questions: should Malta remain in the eurozone quagmire?
victor caruana
Sep 8th 2011, 08:20
NEGATIVE OUTLOOK
Mr Carmelo Micallef
Sep 8th 2011, 09:49
You can always vote for Little Joe and The Dinosaurs when the time comes ...... you can help recreate Mintoffian heaven on the Planet Uranus
Mr Joseph Aquilina
Sep 8th 2011, 10:31
I am really said to see a comment like this one ... it not only shows that some people are happy with the bad things that happen to others ... it is even worse ... PL supporters are happy when bad things happen to them (as Maltese) as long as PN is "seen" to be in a bad light ... the problem for such PL supporters is the fact that they do not realise that the downgrade by Moody actually says that this was done not because of Malta but because of the general situation in the EURO and global Markets ... Which means that Moody is in fact saying the same thing that PN has been saying for a long time, and PL (and it supporters) not believing it....
Charles Vella
Sep 8th 2011, 15:43
Dear Mr. Joseph Aquilina,
The real thing is that people like victor caruana have no eyes, they fail to see that their country is doing well... and I cannot blame people like vicky because lejber only brought shame to us as Maltese citizens, but as long as its lejber its good...
Untill some days ago I use to think that Mintoff did something right, buy bringing 14 million Maltese Lira to our shores, HOWEVER the truth I had discovered was shocked, as the 14 million Lira where given, not just to Malta, but also to Cyprus, Italy, Bahrain, Falklands and other countries who had a military base to keep the Military base untill they where ready to back out from the country.
Mintoff did nothing, and brought NOTHING to Malta... and we where made to believe that Mintoff worked hard for those 14 Million which where left to rotten in the 'borza ta Malta' instead of being invested and making 14 Million 50 Million! That is what lejber does... they are dangerous and NOW disvovering this truth through an American News Paper published in 1972 I will defenately NEVER vote lejber!