Last week's contribution assessed the growth of the gross domestic product in the first quarter of this year and pointed out that the main indication that emerges from the most recent gdp data is the resilience of our economy.
Our economy is more volatile because of its small size, its reliance on the international economic situation and its ability to tap fully the opportunities for the export of goods and services.
Yet, in spite of this volatility, the Maltese economy has performed well, and this performance can only be due to its resilience. This resilience in turn leads to more stability.
Other developments in the last 15 days point to this resilience, which we should never underestimate. One was the publication of the report on Malta by the international credit ratings agency Standard & Poor's. This report confirmed the previous one that gave "a stable outlook" to our economy.
This stability is based on the results achieved so far in the restructuring process of our economy, the prospects for further restructuring, and the commitment to reduce the public sector deficit while maintaining a healthy position in relation to our external reserves.
The S&P report applauds government's efforts to prepare the economy for membership of the European Union as well as its efforts to liberalise further the economy by removing the rigidities with which it is straddled. These are expected to improve the competitiveness of our businesses by making them more flexible.
This report also provides some analysis of economic data and points out that the net external assets of the financial sector are equivalent to 24 per cent of the receipts of the current account of the balance of payments while net public sector assets are 25 per cent of current account receipts - higher than one would find among similarly rated economies.
The fact that in spite of the international economic slowdown and the consequences that it brought about, Malta still managed to maintain the rating that it had been given previously confirms the resilience of our economy.
However, S&P were not the only ones to confirm their opinion on the Maltese economy. Another international credit ratings agency, Moody's, also confirmed its rating for the Maltese economy which was A3 with a negative outlook.
Moreover, the S&P report places Malta in a leading position when compared to the other countries that are also seeking EU membership.
This completely contradicts those claiming that our economy is in a worse state than it was a year ago or less recent than that. I can understand the need to be self-critical because it eliminates over confidence, but one must also be realistic about one's success.
And, in this regard, we have been successful so far to weather the storm that has hit our economy from outside. The resilience of our economy is proven also by the number of firms based locally and that have announced expansion plans and further investment in their Maltese operation.
Some of these firms have preferred to consolidate and extend their operations in Malta rather than elsewhere.
A cursory reading of the newspapers over the last 12 to 15 months would show that firmly established companies such as Dowty, Methode, Playmobil, Baxter, De La Rue, Menrad, Toly, Delta (formerly Pharmamed), Infratec and Cromsonwing have all embarked on investment programmes that collectively well exceed the Lm25 million mark. This does not include new investment by companies not yet established here and investment by other existing firms that are equally significant.
One would always wish to have more investment but these results definitely indicate a stability in our economy that some very often do not credit it with.
The data on unemployment that was published recently is another indicator of the resilience of the Maltese economy. In May 2002, unemployment stood at 7,423, while in February of this year it stood at 7,941; a drop of 570 persons in three months.
The balance of payments data for the first three months of this year also showed an improvement from a negative Lm34 million to a negative Lm13 million when compared to the first three months of last year.
Yet another indication of the state of the Maltese economy and its ability to withstand the effects of the international economic slowdown is the information that emerges from the ETC Employment Barometer, which is based on a survey with employers. Employers expressed overall optimism in their business prospects for the coming months.
In fact, 43 per cent of those interviewed expect a rise in the demand for their products. Employers expect an overall three per cent increase in their number of full-and part-time jobs.
Furthermore, 61 per cent of companies that responded to this ETC survey claim to be facing labour shortages.
We should, however, not be complacent about our economic performance. Various reports prepared by independent organisations claim that there is a great deal of expectation for the result of the EU membership referendum next year, and that the slight possibility of Malta not joining is bringing about an element of uncertainty.
The resilience of our economy cannot be doubted but needs to be strengthened; our membership of the European Union would do this.