In his opinion piece ‘Feeling the growth of GDP’ (December 10), Michael Briguglio makes some interesting observations on whether people in Malta are feeling the effects of GDP growth. I sympathise with what he said regarding the plight of low-income people. But I feel his white-and-black approach tends to obfuscate the picture.

It is impossible, in a short letter, to talk about the many indicators one can quote. But let me just point out that the rate of growth in household consumption grew from 2.85 per cent annually between 2010-2013 to 5.2 per cent in 2013-2017. Increases in household consumption would not be sustainable if GDP does not reach the great majority of people.

Despite lack of detailed statistics, an analysis of available ones to determine what happened to essential and discretionary consumption shows that the percentage of essential consumption in total household consumption has decreased from 51.7 per cent in 2010 to 46.3 per cent, whereas discretionary consumption grew from 38.4 per cent to 42.8 per cent over the same period. Again, an increase in discretionary consumption indicates that most families have the extra money to spend on non-essential items. Briguglio ignores completely the impact that increased employment has had on the financial wherewithal of families. Employment has increased by 38,200 over the last five years, compared to 18,100 in the previous four years. I estimate this has increased household consumption by an average €265 million annually over the last four years. One of the reasons for this is that the rate of growth of compensation per employed person rose from 1.5 per cent every year to 2.5 per cent.

Finally, though government expenditure as a percentage of GDP decreased from 42.8 per cent in 2012 to 38.1 per cent in 2016, the share of expenditure on housing, health and social protection has held its own, indeed, increased slightly (later figures not available).

So, growth in GDP is being felt, though I agree that low-income families will always be at a disadvantage. In this context, it is pertinent to point out that social protection benefits per inhabitant have risen by €454 in the four years to 2016.

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