Forecasting how the economy will perform next year is a difficult task but while the government plays the prudence card to reassure everyone that targets will be met, economists disagree on whether it will manage.

“I am very sceptical of the figures presented in the Budget and I can understand now why the European Commission’s forecasts last week painted a bleak picture for Malta,” economist Joe Vella Bonnici said.

In its autumn forecast the Commission said Malta’s economy will grow by 1.3 per cent next year and the deficit will reach 3.5 per cent.

The government has defended its projections that the economy will grow by 2.3 per cent next year which will translate into higher tax revenues without the need to increase taxes.

But Mr Vella Bonnici has his doubts. He pointed out that while the government expected recurrent revenue to increase by €266 million next year, the Budget figures showed a downward revision of €100 million in revenue for this year.

“These are actual figures for this year, not predictions and they are already going haywire,” he said.

The expenditure for this year is also being revised upwards by some €40 million, he added, insisting that the government was simply playing around with figures.

Mr Vella Bonnici said the Budget talked of 2.3 per cent growth next year but a presentation given by the Finance Minister before the speech pencilled in growth at 1.3 per cent.

“The figures are unclear and the Budget was a public relations exercise rather than a prudent exercise in fiscal and economic management,” he said.

Economist Lawrence Zammit was less cynical about the figures presented in the Budget although people he spoke to did get the feeling that the Budget may have been optimistic.

“It looks ambitious and challenging but it is not a risky gamble,” he said, insisting that everything depended on how the European economy fared next year.

“The real economy in Europe is slowing down but as long as it does not go into recession, the targets will be met,” Mr Zammit said, noting that the European Central Bank had just lowered interest rates to stimulate growth.

Malta’s economy, he added, was diverse and this served as a good shock absorber. “Diversity will still be there in 2012 and with the opening of the Libyan market, opportunities to create wealth are bound to arise.”