16 OCTOBER 2002
- fourth quarter economic growth seen climbing higher
Finance Minister John Dalli was upbeat on the economys short-term prospects this week when he said, "We are now again heading in the right direction. Both deficit and debt are being contained, our economy is showing signs of growth and average incomes are rising."
Dalli was speaking, together with Social Policy and Deputy Prime Minister Lawrence Gonzi, during a review of the governments economic performance over the past four years.
The government projects that economic growth should continue to recover over this years fourth quarter, that public debt is nearing the targeted 60 per cent of Gross Domestic Product and that the national deficit is drawing close to the projected 4.6 per cent of GDP.
The projected economic recovery, Dalli explains, is being catalysed mainly by increased export activity in the manufacturing sector, adding that local firms are projecting higher export orders and possible additions to their workforces as long as foreign demand conditions continue to improve. This, in turn, is expected to help domestically oriented firms through the multiplier effect.
He adds, "Although government lays down the parameters for economic prosperity - all the parties have, to one degree or other, played their part in achieving the turnaround. Underpinning all this economic momentum is a climate of greater confidence in the country and in ourselves. Fostering this sense of confidence has perhaps been one of this Governments greatest achievements."
Meanwhile, much of the governments six-year plan to reduce government debt and manage the structural deficit, kicked off in 1999, has been realised.
Among the most tangible results, Dalli explains, are estimations that by the years end the structural deficit, which stood at 12 per cent of GDP in 1998, will be in the region of 4.6 per cent of GDP while national debt will be close to the governments target of 60 per cent of GDP.
The privatisation process is still under way and negotiations on the Malta Freeport have been resumed. Government has concluded talks with a Greek operator with a view to the privatisation of Public Lotto and the Lotto Receivers Union is also holding talks with the operator and further announcements are expected in the near future. The government is in the process of issuing a call for interest in the Mediterranean Offshore Bunkering Company (MOBC).
The Ministers also cited the fact that over the first quarter of 2002, Maltas GDP increased by Lm11.4 million over the same quarter last year and reached Lm399 million. In real terms, the GDP increased by 1.4 per cent. By the end of 2002, GDP is estimated to reach Lm1.7 billion an increase of Lm500 million over the past years.
The countrys Gross National Product, meanwhile, had increased by Lm14 million, or 3.5 per cent, to Lm412.5 million over the same quarter last year - representing an increase of 2.8 per cent in real terms.
Major capital projects facilitated and encouraged by government, such as Tigne, Manoel Island Cottonera, and the Valletta Cruise Liner terminal are currently underway. Besides being major current development projects, these will also serve as a possible long-term source of sustainable employment for the future.