The Malta Fiscal Advisory Council had urged the government to meet the reform timeframes suggested by the International Monetary Fund, aimed at increasing transparency.

The council said the priority should be those areas where ratings were lower, namely in relation to the comprehensive information on fiscal risks, tax expenditures and the financial situation of public corporations.

It noted, however, the overall positive ratings obtained, “with almost all principles already being adhered to, albeit to varying degrees”.

The MFAC also identified potential fiscal risks that could have a negative impact on public finances in Malta, and said these point towards the need for a fiscal risk register.

The council on Thursday released its annual report for 2018, which was tabled in Parliament on April 17.

In his statement, the chairman noted that in recent years, economic growth has been robust and supported by vigorous job creation. This has enabled the annual fiscal balance to swing from a deficit into a surplus, with further improvement derived from the proceeds generated through the Individual Investor Programme.

The expansion in economic activity and the improved public finances have also enabled the steady decline in the public debt-to-GDP ratio.
“The Fiscal Council reminds of the importance that these achievements are not unwound through unsustainable expenditure initiatives or unnecessary revenue easing. This would maintain a fiscal buffer as a safeguard against the possibility that some adverse economic risks might eventually crystallise.

“At the same time, the right balance needs to be struck so that the annual expenditure allocations across ministries and state functions safeguard the effective delivery of good quality public services. This is necessary to sustain the country’s long-term growth potential and to maintain social cohesion,” he said.

The Annual Report, including the audited financial statements, is available on the MFAC’s website http://www.mfac.org.mt.