IMF expects Malta’s growth to far outstrip eurozone average

Malta should register healthy economic growth this year despite the economic and financial turmoil hitting the euro area, according to the International Monetary Fund (IMF).

In its latest twice-yearly World Economic Outlook, published yesterday, Malta’s economic performance for this year was revised slightly upwards from 2.4 to 2.5 per cent of GDP while projections for 2012 were kept at the same level as last April’s forecast, at 2.2 per cent.

This reflects a slower economic growth next year in line with that projected for the eurozone, whose projections were revised downward. The euro area is now expected to grow by just 0.2 per cent in the last quarter, bringing its total GDP growth to 1.6 per cent in 2011 and to 1.1 per cent in 2012.

By contrast, Malta is predicted to enjoy a GDP growth of above four per cent in the last quar­ter.

“Malta is performing above average next to the rest of the euro area and it’s not associated with the current turmoil on the markets,” an IMF official told The Times.

The favourable outlook comes after the credit agency Moody’s downgraded Malta’s government bond rating from A1 to A2 and revised its outlook to negative, after predicting risks on the horizon for the Maltese economy.

The IMF too had a word of caution in this regard. “Slow growth in the Eurozone will have a negative impact on the entire region,” the official warned.

However, local unemployment is expected to continue on the downward trend, dipping to 6.2 per cent in 2012 from the current 6.9 per cent. The average in the euro area in 2012 is predicted to be much higher at 9.1 per cent.

Inflation is also expected to be under control although still considered high compared to EU levels. From the current 2.6 per cent predicted for this year, consumer prices are expected to go down to 2.3 per cent in 2012. In the Euro area, average inflation is expected to be higher than Malta’s this year, at 2.8 per cent, but would go down to 1.7 per cent in 2012.