The economic support measures implemented by the Maltese Government during 2021 are estimated to have boosted Malta’s GDP by 2.5%. This is half the economic growth that is projected to happen this year. In absolute terms, this translates into an upward push of around €335 million, implying an indirect job impact of approximately 475 jobs.
Taken together the measures implemented in 2020 and 2021 will have boosted Malta’s national output by close to a billion euros. This is nearly one-thirteenth of our country’s gross domestic product.
This information comes out of the comprehensive report published by the Office of the Principal Permanent Secretaryahead of the Budget for 2022, detailing how many budget measures were implemented in the first three quarters of the year.
The report shows that 79% of all budget measures are already in force, marking a 7% increase on the average achieved in the last eight years.
The report also includes an assessment of the economic impact of Government’s support measures. It shows that the various assistance packages in 2020 and 2021 had boosted Malta’s gross domestic product by a substantial five percentage points of GDP.
Taken together the measures implemented in 2020 and 2021 will have boosted Malta’s national output by close to a billion euros.
In absolute terms we are talking here of a boost of some €635 million. Not only did the wage supplement save about 93,000 jobs directly while another 6,000 jobs were safeguarded by new social security assistance schemes, the various assistance packages, particularly the voucher scheme, indirectly sustained some 900 other jobs.
Instead of turning the tap off during 2021, as many other governments had to do because of fiscal strictures they faced, Malta’s government continued to sustain businesses and families. Instead of higher unemployment, Malta now has the lowest number of unemployed persons on record. Instead of higher bankruptcies, Malta now has the highest number of active businesses in history. Instead of more people on social benefits and at risk of poverty, Malta now has the lowest number of persons depending on social assistance and the lowest rate of persons at risk of poverty and social exclusion.
Note that the assessment made by the Office of the Principal Permanent Secretary did not account for the economic impact of the higher residential property sales because of the reduction in stamp duty. This measure by itself resulted in the number of promises of sale being one and a half times the amount conducted before the measure was announced.
It is also an immediate impact assessment. In reality, if the Maltese private sector was allowed to tank, the longer-term scarring of our economy would have been much larger than one billion euro. The much milder 2008 recession took many more years for employment to recover, especially in some high valued added sectors like manufacturing.
Now that the basis for Malta’s economic rebound is well set, the focus of policy must shift towards generating future growth. Here the push is clearly for measures to drive the digital and green transformation of Malta’s economy.
The budget for 2022 will inevitably have a number of policy measures in this regard, which will sustain the large number of projects included in Malta’s Recovery and Resilience Plan