Economists have to go upon facts as they perceive them, while endeavouring to avoid the temptation to tinge them with too much subjectivity, hard as this usually is.
In Malta they are indeed grateful they can rely unhesitatedly on the NSO’s integrity and competence, particularly since we joined the EU 11 years ago, unfailingly cooperating with Eurostat.
Still, without objective interpretation, NSO’s output would lose a lot of its value. That’s where economists come in handy. Sadly, not in sufficient numbers: either that they don’t bother or somehow fear retaliation from pea-size-minded politicos on the side of the fence which is not quite satisfied with the economists’ views.
For instance, take the GDP figures for Q1/2015 published recently. Except for gross capital formation, admittedly an important depart-ment, all other aspects (such as four per cent real growth rate) are deserving of praise even in European circles where we chiefly mingle with peers.
Our Finance Minister must indeed feel satisfied, and comfortable at the helm. He can even start thinking of a balanced budget for 2017 , but is well advised not to fall into the temptation of showing off any prowess with his EU partners. Truly, he has managed to reduce our sovereign budget deficit faster than expected, and without hurting the economy. Already an admirable feat in itself , in contrast with Ireland, as an example, which was allowed until 2018 to set its fiscal house in order but which is now already pleading for an extention of the agreed timeframe.
Probably, it’s the Keynesian in me that makes me feel this way. Keynesianism tends to pooh-pooh the doctrine of a yearly balanced government budget, though not necessarily over the span of an economic cycle. During my research work at LSE in the early 1960s, I once came across one of Keynes’s utterances which I then found difficult to understand “The boom, not the slump, is the right time for austerity.” If only the Greeks were told of this maxim.
Personally, I don’t notice any ‘boom’, however small, on our economic horizon. That’s good. A boom inevitably precedes a slump.
Best is to leave the economy as is: healthy and growing.