‘We cannot cushion all inflation’ – Clyde Caruana

Government cannot address all the inflationary impacts resulting from the Russian invasion of Ukraine, finance minister Clyde Caruana told Business Today.

“We have committed ourselves to intervene in keeping the prices of energy commodities and certain basic items stable but we cannot cushion all inflationary effects,” he said.

As to what his priorities will be in the coming weeks, Caruana said he would be looking at the ramifications of the Ukraine war on the Maltese economy and seeing what was needed in terms of responding to this crisis.

When quizzed over the electoral pledges made in the last four weeks that translated into financial contributions or fiscal measures, Caruana defended the feasibility of his party’s political manifesto.

“We have a vibrant economy which is promising more returns and this supports many of the predictions we have made,” he said.

“We will implement our promises, there is no issue about this.”

Caruana was confirmed in his post yesterday when Prime Minister Robert Abela announced his new Cabinet following the Labour Party’s victory in Saturday’s general election.

He was elected in two districts - the second and eighth districts. Previously he served as Abela’s chief of staff, before being co-opted to Parliament in 2021 and appointed finance minister.

A lack of credible local investment opportunities has seen the launch of numerous bond issues over the past couple of years

Asked whether he was concerned about the numerous Bond issues in the local market, Caruana said that in the absence of advantageous credit facilities, investment companies would always seek other methods of credit.

On local banks, he repeated the claim that Maltese banks were too conservative when it came to issuing credit.

“As government, we have addressed the issue of opening current account facilities, but if the banks have no appetite for offering credit for certain products, that is their prerogative,” Caruana said.

“The market will obviously then respond to these new realities.”