The Central Bank is revising its economic projections downwards, the Governor of the Central Bank, Michael J. Bonello, has told Reuters in an interview.

"Our latest figure was 1.6 to 1.7 (percent growth) for this year, but that was a long time ago before the end of 2008. Now we are revising our projections,." Mr Bonello said.

"For 2008 we were expecting 2.5 percent growth, and now we have the actual number, which was 1.6 percent, so this is going to have to be factored in to our new projections which we will publish in April.

"Obviously with these latest numbers we have had from the euro area and EU, and our own fourth quarter number, then obviously our projections for this year are going to have to be revised down," Mr Bonello said.

The National Statistics Office said last week that GDP in the fourth quarter of last year shrank by 1.2 percent.

Mr Bonello said he did not know what the projections would be for the whole of this year, but they were likely to show slight positive growth.

"This is very small economy and therefore even relatively small changes over the course of the year can have an impact one way or the other," he said.

"Tourism is the key I think because it has got a big multiplier effect. So far January and February have been down on last year, which was a record year. Capacity on airlines has been reduced, but there are some new routes opening up in April so if we manage to compensate from April onwards then that might help stabilize things."

"The UK also still remains an important market particularly for tourism, and of course with the pound where it is that has been a major factor."