Malta occupies the bottom place in the EU table when it comes to growth in exports.
The statistics are revealed in a Eurostat release which compares the export and import figures for the 25 EU states.
During the first five months of the year Malta’s exports have taken a nosedive when compared to the same period last year.
This was far from a surprise. NSO figures had already shown a hefty drop in exports in the first quarter. More alarmingly exports have decreased by EUR5 million in the month of June, a month which is not covered by the Eurostat figures.
This was accompanied by a decrease of 18 per cent in industrial orders.
But the worst news is that Malta is lagging far behind other EU countries when it comes to growth in exports.
“Malta was by far the worst performer during the first five months of this year,” economist Karmenu Farrugia told The Malta Financial and Business Times.
While Maltese exports fell by 11 per cent, exports in the other new member states who joined the EU together with Malta last year have sky rocketed. Cypriot exports have increased by 75 per cent.
Latvian exports have increased by 32 per cent while Lithuanian and Estonian exports have increased by 27 per cent.
Analysing these statistics Karmenu Farrugia observed that while exports have gone down by 11 per cent to EUR700 million, imports have gone down only by four per cent to EUR1,100m, resulting in an overall deficit of EUR400m.
“What is worse is that per capita the figures are even more telling - Portugal's performance is only slightly better than ours, yet its deficit is just 12 times ours, with a population more than 12 times ours,” added Farrugia.
According to Farrugia these statistics are further proof of the Maltese economy's lack of competitiveness. He attributes this lack of competitiveness not just to excessive production costs and bureaucracy but also to the “exploitation by those operating in an oligopolistic environment like banks.”
Farrugia says: “The practices of these operators are resulting in an unjustified price increases which are making inflation a real threat.”
Farrugia believes that drastic action is required to bolster the country’s economic competitiveness. This would require sacrifices to make Malta more attractive to direct foreign investment.
The drastic steps recommended by Farrugia include an immediate wage freeze, a review of government induced costs and charges and “the control of prices where competition is not strong enough to see to it.”
Whether any government will be willing to pay the political costs for such decisions remains doubtful even as statistics continue to show that the holy grail of economic recovery is still eluding government.