The government has a challenging year ahead to reach its fiscal and economic targets, given the expenditure projections laid out in the national budget, the Malta Employers' Association said.

In its reaction to the Budget, it said the objective to achieve growth-friendly consolidation, with a stated target fiscal deficit of 1.6 per cent of GDP in 2015, depended heavily on the outcome of critical decisions in public transport, Air Malta and the generation of energy.

The government also faced an increased wage bill due to collective agreements as well as an expanding labour force in the public sector.

The projected injection to Air Malta, estimated at €40 million, together with the €30 million subsidy for public transport and additional €70 million to subsidise household and commercial energy rates, as well as the added pressure on expenditure on core services such as health and education, would certainly make fiscal consolidation a difficult task.

The MEA welcomed the cuts in energy rates for industry, which would relieve many businesses of excessive energy costs.

Yet, given the global scenario of plummeting oil prices, it was important not just to reduce the rates, but to position them at a level that make local enterprises competitive.

The MEA's reaction in full can be read in the pdf link below.

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