The financial surplus announced by the government is a positive development, if it can be sustained, the Malta Employers' Association said today.

It said a fact that the debt/GDP ratio had been reduced due to economic growth - this was also positive news, but this trend needed to be sustained.

But the fact that this result emerged from a reduction in capital expenditure was of concern.

"Present and future governments need to take measures to stabilise recurrent expenditure which is still on the rise to the tune of seven per cent per annum, and this is one of the main reasons that the association is critical of the increase in employment in some areas of the public sector in a situation which is close to full employment," the association said.

"The sustainability of a balanced or surplus budget depends on the governance of public funds and to economic growth generated by the private sector which can sustain the increased demands of services such as health and education which are provided by the public sector."