Finance Minister Edward Scicluna told Parliament yesterday that the government had strengthened the economy, with growth picking up and the deficit and inflation both going down last year.

Speaking during the debate in second reading of the Budget Measures Implementation Bill, Prof. Scicluna gave an account of the government’s finances, saying the projected progress had been achieved with regard to cash flow, income, recurrent and capital expenditure and debt servicing. The deficit has been reduced from $342 million to €180 million.

Income tax collection was €6 million over the sum projected. VAT revenue was less than estimated because of what was still owed by Enemalta.

Social security revenues were €3 million down. Similarly, less income was derived from licenses, fees and excise duty. Prof. Scicluna was optimistic, however, that by focusing on income tax and VAT due to the Treasury, the country’s deficit would continue to be below the three per cent of GDP threshold.

An average of 2.2 per cent economic growth had been registered over the first nine months of the year. Inflation in 2012 was at three per cent and in November it stood at just 0.2 per cent. He pointed out that at one point in August inflation was actually zero but this was never mentioned in the media.

In 2012, the harmonised price index was up 3.6 per cent and in November 2013 the figure was 0.3 per cent.

Employment was still strong, he said, referring to the last Labour Force Survey which showed there had been an increase of three per cent.

Unemployment had remained stable at an average 6.4 per cent. Prof. Scicluna complained that some of the media continued to give the wrong impression by using the wrong yardstick with regard to unemployment figures because this could not be measured on a monthly basis. The rate of unemployment of the under 25s had gone down and this, the minister said, was a very positive sign for the future of this generation. Prof. Scicluna said all records had been broken with regard to tourist expenditure with a nine per cent rise, a more than satisfactory contribution to GDP.

Those who were saying that the spectre of unemployment was rearing its head were looking at the wrong figures

In other sectors, such as exports of electronics and mechanical parts, revenue was slightly down but this was compensated by an increase in the export of fish, chemicals, pharmaceuticals and crude materials. Retail trade turnover increased to 0.6 per cent. Here again, Prof. Scicluna complained that despite the media reports that consumption had gone down, statistics showed otherwise. If that were the case, the government’s income from VAT would have gone down but that was not the case. The balance of trade had improved by €70 million between January and November.

Referring again to employment, Prof. Scicluna said those who were saying that the spectre of unemployment was rearing its head were looking at the wrong figures. The figures were stable and far from disturbing.

He said the government was concentrating on improving supply so that when the de-mand came from abroad, the country would be all set to service it. The Budget had a plethora of such incentives and the updates showed the government had been effective in creating a stronger economy and percolating the benefits to all sectors of society.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.