(Adds Finance Ministry's reaction)

The level of investment in Malta had gone back to what it was 15 years ago dropping by more than 26 percent in the first six months of the year, the Labour Party's spokesman for the Economy Gavin Gulia said.

He said in a statement that during the last budget, the Prime Minister and the Minister of Finance had forecast an economy growth of 2.5 percent.

Opposition leader Joseph Muscat and the Labour Party had expressed serious doubts about this as did the European Commission and the Central Bank some months later.

Dr Gonzi and Mr Fenech were now saying that there was to be a drop of around 0.6 percent in economic activity in Malta this year but statistics published by the NSO showed that the economy had shrunk by 2.6 percent in the first half of the year and was expected to continue shrinking in the second half, Dr Gulia said.

FINANCE MINISTRY'S REACTION

In a reply, the Finance Ministry said that the government’s priorities at this time of international crisis were jobs and the standard of living.

On the contrary, the Opposition was interested in figures. It preferred a low deficit and high unemployment.

The ministry said that in line with its priorities, its work in the past months was aimed at keeping economic activity going so it came up with several incentives and provided support for entities going through difficulties to overcome challenges, saving 2,500 jobs.

It also increased support in the tourism sector.

When this year’s budget was prepared, it said, circumstances were very different and that was why targets were not met. The same could be said for other EU countries.