The Malta Fiscal Advisory Council (MFAC) has released its second annual report.
In his statement, the MFAC chairman noted that, in its second year of operations, the institution strengthened its organisational structure, established a regular publications timetable and gradually expanded its visibility.
He highlighted that “sound fiscal policy is critically dependent on taking the right and timely decisions with regard to fiscal sustainability which is supportive of economic stabilisation and growth”.
In this respect, the MFAC welcomed the government’s sustained commitment to reduce the headline fiscal deficit and the public debt, expressed as a ratio of nominal GDP, in line with the medium-term objective of achieving a balanced fiscal position by 2019.
The chairman also remarked that “convergence towards the stipulated 60% debt-to-GDP threshold can be achieved earlier than originally anticipated, as long as the existing fiscal plans remain unchanged”.
The MFAC felt it was important that the strategic focus would be broadened beyond the traditional headline fiscal targets to direct more attention towards the numerical fiscal rules specified in the Fiscal Responsibility Act and in the Stability and Growth Pact, particularly the required improvement in the fiscal balance in structural terms and the expenditure benchmark established by the European Commission.
Apart from presenting information about the role and activities of the MFAC, the annual report also provides an overall coverage of the recommendations made by the council in the various reports published to date.
A chapter is dedicated to the review of the progress achieved with respect to the recommendations made in 2015, which dealt with the conduct of fiscal policy, the introduction of new legislation, the budgetary process and fiscal transparency.
A separate chapter reviews the 13 new recommendations made by the MFAC in 2016, providing both an explanation and the rationale for each recommendation.
The report also includes three special features chapters, with the aim of increasing awareness and understanding about public finance issues among stakeholders.
The annual report, including the audited financial statements, is available on the MFAC’s website.