Economic growth in the first three months was the lowest in 13 quarters but still more than double the euro area average, official figures show.

Real GDP growth slowed to 4.2 per cent in the first quarter this year, according to the National Statistics Office.

The figures released last week indicate a deceleration in growth from the results of 2014 and 2015 when GDP grew by more than six per cent.

Finance Minister Edward Scicluna was not surprised by the result and played down the significance of the slow down.

“I don’t think we can speak of a deceleration in quarter one, since growth had reached an equilibrium and settled at roughly the same mark in the previous three quarters,” he said.

Further economic growth was constrained, he added, by the lack of availability of manpower and quality office space, among other things.

Further growth constrained by the lack of availability of manpower and quality office space

Prof. Scicluna said investments that were in the pipeline, including some of the high rise projects that have received permits, would not only help generate immediate economic activity but bolster growth for the long term.

“These investments will ensure more permanent activity over the medium- to long-term since they will help increase the economy’s capacity to continue functioning at top gear,” he said.

According to Eurostat, the European statistical agency, Malta still enjoyed the third highest first quarter growth in the EU despite the slowdown. The Maltese economy maintained the above average performance it has enjoyed since 2013. By contrast, Germany experienced 1.7 per cent growth in Q1.

Measures promised by the Labour Party to increase pensions and give tax refunds are expected to bolster consumption by injecting more money into the economy. However, Prof. Scicluna said investment was the key driver to sustain the above average performance.

“Investment that generates jobs and improves the country’s infrastructure is what we will be looking at to maintain the above average growth over the long term,” he said.

During the election campaign the PL had said the measures in its manifesto, including a €700 million road improvement project spread over seven years, would provide a growth stimulus of more than two per cent.

The PL projected that its stimulus package would see GDP growth averaging at 6.5 per cent per year.

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