The government is forecasting that economic growth will reach 3.6 per cent in real terms in 2016, down from the anticipated 4.2 per cent for 2015.

This growth will mainly come from ongoing investment and jobs created, as well as higher revenue. Employment is due to increase by 2.3 per cent this year, slowing down to 1.3 per cent in 2016 and lowering unemployment to 5.6 per cent.

“In the two and a half years of this legislature, there was an increase of 13,450 full-time jobs,” Finance Minister Edward Scicluna said, adding that this worked out to 17 new jobs every day. Of these, 10,900 were with the private sector.

The government hopes to bring in €3.6 billion in recurrent revenue, although EU funds will be much lower than in previous years as the flurry of projects from the previous EU budgeting period ends and the new ones come slowly on line. With the GDP growing to €8.98 billion from €8.46 billion, and the deficit being reduced from €196 million this year to €102 million next year, the resulting ratio is also improving even though the absolute debt will still increase by four per cent.

The deficit-to-GDP ratio will fall from 2.1 per cent in 2014 to 1.1 per cent next year, while the debt-to-GDP ratio will also fall from 68.3 per cent in 2014 to 65.2 per cent in 2016. The latter is forecast to drop even further, to 63.62 per cent, in 2017.

Prof. Scicluna acknowledged the progress made but warned: “The mountain of debt built up in 25 years will not be wiped out in just five years.”

He added that the deficit-to-GDP ratio of 1.6 per cent which should be reached by the end of 2015 was half the one his government found two years ago.