Mixed Comments By IMF On Malta's Economy

Malta Media

07 August 2001

This story is reproduced by kind permission of Malta Media at: http://www.maltamedia.com/

The International Monetary Fund (IMF) on Friday evening released a report on the current state of the Maltese economy mixing positive and negative observations.

The IMF said that while Malta's economy has improved, the country is still facing the challenges of the past few years such as the reduction of its large external deficit and making its monetary policy more flexible. The Fund attributed the improvement in Malta’s economic performance to better policies implemented by the government and a better international economic environment. It also remarked that while employment rose strongly and unemployment fell to 4%, inflation remained at bay. It is interesting to note that the unemployment figure quoted by the IMF was not taken from the Labour Force Survey. The report also noted that the country has managed to reduce the fiscal deficit to around 4%.

The IMF’s forecast for Malta is however bleak. It said that the external deficit of the country could be negatively affected by the slowdown of international economic activity. The IMF pinpointed the reduction of the fiscal deficit as a top priority for the coming months. It said the Maltese government will have to pay more attention to this problem and implied that further fiscal changes could be necessary. The fund said the government could also turn to a reform of its spending, especially on privatisation, welfare, subsidies to public enterprises and the public wage bill to achieve this aim.

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