A new tool offered by the National Statistics Office allows researchers to forecast the effect on local industries of a sudden increase in tourists or the assumed impact of Brexit, among other things.
The NSO has published what are known as the “supply, use and input-output” tables, which show the links between 128 product and 84 industry groups.
Director general Reuben Fenech, who believes that this tool will help policymakers in allocating resources more efficiently and businesses to make forward looking choices, drew an analogy with the body’s anatomy.
“Since we have a very good understanding of the body’s structure, we know that if you input a lot of alcohol, for example you’ll have liver and memory issues.
“In a similar way, this is a circuit with interlinked industries such as tourism, construction, and hotels and restaurants. Following a change in one of these industries, we can see the effect across the board in our economy,” he told this newspaper.
The tool will help analysts understand how the economy reacts to changes in the environment, investment and employment, among others.
Following a change in one of these industries, we can see the effect across the board in our economy
Yesterday, senior university lecturer Ian Cassar presented a simulated impact of the effect of Brexit on the Maltese economy during a seminar held to help analysts and researchers understand the new tool.
Dr Cassar showed what the impact would look like, based on assumptions in changes in demand of sectors like finance, hotels and restaurants.
This tool is based on the most recent completed data on the Maltese economic structure – that of 2010.
Asked how relevant this data was for today’s economy, Mr Fenech said that despite societal changes, the composition of the economy remained similar.
The same applies for the Household Budgetary Survey, conducted every seven years with a sample of 3,700 households.
Initial data will be released at the end of this year, six years since the latest published results. Earlier this year, economist Philip Von Brockdorff had said the update was long overdue and Union Ħaddiema Magħqudin also called for its publication, given the current debate on minimum wage.
Mr Fenech disputed the need for more frequent updates, given the expense involved, saying that changes would not be very significant over shorter terms.
The whole process of an HBS takes two years – from the training of the interviewers, to the gathering of a full year of expenditure to catch seasonal trends, to the filtering and verification of data. The data collected from the survey are used as the basis for the Harmonised Index of Consumer Prices and the Retail Price Index, which are in turn taken into consideration for the Cost of Living Adjustment (COLA).
Final figures are not yet available, however, NSO is expecting a decrease in the expenditure share on food and beverages consumed at home, and an increase in the expenditure on recreation and leisure, such as travel.
The largest share of expenditure will probably remain on food and beverage, which in the last budgetary survey was 22 per cent.
An increase in the expenditure on education and health – despite the government providing such services for free – is also evident.