Updated: Inflation rate destroying many economic sectors - PL
(Adds ministry's statement)
Growing inflation in Malta was one of the reasons for the bad certificate obtained by Malta from credit rating agency Moody's, Labour Party spokesman Karmenu Vella said in a statement.
Mr Vella said that in the past years, inflation in Malta was much higher than in other European countries, especially when it came to food and energy prices.
The high inflation rate was destroying many economic sectors by reducing their competitiveness and profit. It was also having a bad effect on families.
Mr Vella said that in the past five years, the average wage in the EU increased by 12.5 per cent while inflation increased by nine per cent. In the same period, wages in Malta increased by five per cent when inflation rose by 9.5 per cent. This showed that wages in Malta were not even covering inflationary costs.
And rather than working to solve the problem, the government was increasing it through additional taxes and tariffs, Mr Vella said.
MINISTRY'S STATEMENT
In a reply, the Finance Minister said that it was not true that the Maltese economy was not growing at a good rate.
Moody’s recognised the fact that Malta had responded well to the economic and financial crisis, so much so that economic growth in Malta last year was among the highest among EU countries.
This year the Maltese economy grew by 2.8 per cent while the EU’s economy grew at an average rate of 1.6 per cent.
Moody’s, the Finance Ministry said, attributed the reason for its reclassification to the uncertain situation in Malta’s neighbour states.
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Mr Carmelo Micallef
Sep 16th 2011, 23:01
Karmenu Vella = Mintoffian Dinosaur
Say anything .... facts irrelevant ....just get into power and then do whatever you want ... back to the 'good old days' (sic) - on second thoughts, very sick!
Kenneth Galea
Sep 16th 2011, 20:06
And what is your point Karmenu Vella????? It means that if you are in power we start taking our baskets to the supermarkets, fill them to the brim and we pay nothing.
Tlabalbu tafu kieku, the same old story. Give the Moody's certificate a break and look at other results from the Eurostat in Brussels about the state of the economy in Malta and listen to what the Commissioner of Employment said about Malta. Moody's cannot in this deep debt crisis in the Euro zone upgrade any country, Malta is no exception.
Matthew Farrugia
Sep 16th 2011, 16:33
It should be clarified that the statement inflation rose by 9.5% means that the inflation rate rose by 9.5% higher than the previous inflation rate. So if the inflation rate stood at 3%, it would rise to 3.29% if inflation rose by 9.5%. An annual increase in the average wage of 5% would cover an inflation rate of 3.29%*; the deflated rise in income is therefore positive. Can journaslists start clearing up politicians' messes to reduce the amount of confusion they spread around?
*Please note these aren't the actual inflation figures, I'm just demonstrating basic mathematics here that political parties choose to ignore.
John Scerri
Sep 16th 2011, 13:26
.'And rather than working to solve the problem, the government was increasing it through additional taxes and tariffs, Mr Vella said........And therefore....continue............What is the solution Mr. Karmenu Vella ?
What you stated says nothing new any foorm of inflation has the effects you mentioned irrespective of whether MLP or PN are in power..........it's always the same..... MLP saying this and that are wrong but never give any solution ...It goes to show just one thing. No plan for any solution exists within MLP.
Mr Carmelo Micallef
Sep 16th 2011, 13:16
Karmenu Vella has stated that the'growing inflation' was 'one of the reason's for the bad certificate obtained by Malta from.... Moodys'.
No. It is not. The annual inflation rate in Malta is 3.1%.
Facts are not important in the world of Labour.