Updated at 7.30pm with PL statement

The Nationalist Party has called on the government to act on challenges highlighted in the Central Bank of Malta report which it said tallied with and vindicated its view.

The PN noted that the report revised downward its GDP growth projections mainly due to the less upbeat assessment for exports. Besides projecting a deceleration in GDP growth, the Central Bank also predicted a slight increase in unemployment in 2017-2019.

The report highlighted the risks associated with sustaining economic growth with one-off measures, as revenues from the IIP programme were expected to be halved over the coming three years. It shed light on the economic and financial impact of a forecast decrease in government revenue resulting from this drop.

To mitigate for this drop in revenue, the Central Bank expected the government to restrain public sector expenditure.

It also confirmed that disposable income was drastically going down as a result of this slowdown in economic activity. It projected a further drop of 37% over two years, which was worrying in the context of an inflationary rate, shadow ministers Mario de Marco and Claudio Grech said.

“The Nationalist Party notes that, all in all, this report tallies with and vindicates the Nationalist Party’s view on a number of fronts namely, that while on the whole the economy is performing well:

• the manufacturing sector continues to face challenges and is losing its competitive edge, a fact that government is refusing to acknowledge;

• government failed to create any new economic activity bar the selling of citizenship programme;

• economic growth in the past years was fuelled mainly by one-off events and that in the absence of such events GDP growth is going to take a knock;

• the fast rate of growth in government’s recurrent expenditure over the past three years is unsustainable; and that,

• the real income of Maltese families is being eroded by inflation. The Maltese economy is working for some but less so for many others who are struggling to make ends meet.”

It called on the government to recognise and act on these challenges and said that rather than limit itself to highlighting concerns, it came out with concrete proposals and alternatives.

It invited the government to give due consideration to these proposals in the interest of all.

PL statement

In a reply, the Labour Party said the PN’s mistakes in its analysis portrayed the amateurism on which the Opposition’s negativity was built.

Contrary to its claims that the disposable income of families would go down, this, the PL said, would, according to the Central Bank report, increase by 3.8% in 2017 and 2.8% in 2018.