Finance Minister Tonio Fenech said today that despite international economic uncertainty the Maltese economy maintained its growth momentum in the first quarter of this year and the outlook remained good.

Speaking at the launching the Economic Bulletin 2007, issued by the ministry, Mr Fenech said GDP growth this year was projected at 3%, slightly lower than last year.

“This country is not helpless despite the new international economic realities,” the minister insisted. “The first quarter was positive, with growth in manufacturing and tourism,” he said. Explaining the growth in the former, he said Malta had become more competitive because unit costs had gone down. He did not give figures.

He also pointed out that despite the economic slowdown in the US, the European economy was proving to be resilient. In Malta, demand remained strong and economic operators had a positive outlook for the year.

He admitted that the rising cost of living was having an impact on families but said consumption was not decreasing and the measures taken in the last budget – such as the cost of living adjustment, tax cuts and the increase in the children’s allowance– had helped cushion the blow of higher prices. The government, however, was considering the situation of low income families who had not benefited from those budget measures.

The Malta Council for Economic and Social Development will hold a meeting on Friday during which the governemnt will explain the current situation and what is being done about it.

Mr Fenech confirmed that the power surcharge would have to rise because of galloping oil prices, but he did not know by how much.

He preferred not to comment on the situation at ST Microelectronics other than to say that the government was still awaiting a reply to its proposals to help the company.

In giving an overview of 2007, the minister explained that GDP was 3.8% in real terms, tourism grew by just over10 percent, the deficit was brought down to 1.8% and unemployment declined by 0.6%.