This is how the European Commission has titled its annual analysis of the state of our country – the country report for 2022. Noting that before the pandemic, our economy was one of the best in the European Union, the Commission’s experts remark that the substantial impact of the pandemic was mitigated by government stimulus measures. This has led Malta to now record a strong growth rate, which is expected to continue in the coming years.
The Commission’s report emphasises that inflation in Malta has not been affected by sharp increases in energy prices. This is in contrast to the rest of the Union, where Governments have not provided the same protection to families and businesses. At the same time, according to the Commission’s experts the economic impact on Malta of the Ukrainian crisis will be limited.
Another aspect pointed out in the Country Report is that employment in Malta continued to increase despite the pandemic, while unemployment remained well below the European average. Even here, the report notes that this was due to measures adopted by the Government. The country report also underlines that the rate of those at risk of poverty or social exclusion in our country has remained below the average in the European Union, falling despite the pandemic.
‘The economic impact on Malta of the Ukrainian crisis will be limited’
– European Commission
In contrast to what the Opposition says, the European Commission experts predict that our national deficit will decrease. This while noting that the deficit was mainly caused by pandemic-related economic stimulus measures. As a result, in light of the economic recovery, not only will the fiscal situation improve but the Country Report even argues that the debt burden will remain below the 60% threshold.
The report commends ongoing reforms that are strengthening innovation capabilities, the skills of the workforce and capacity of the institutions. These reforms, partly supported by funds from the Recovery and Resilience Facility, are deemed to help ensure our country’s growth model to be sustainable. The European experts in fact show approval for what they term “crucial” reforms to strengthen the judiciary, governance, and overall transparency. So much so that the report states that “the improved business environment will provide a solid foundation for investment and productivity growth”.
The report concludes that Malta is doing very well with regard to achieving sustainable development goals.
Among others, the foreign experts state that our country is performing very well in terms of indicators relating to poverty and health, as well as on improving social and economic justice. Even with regard to working conditions, economic stability and clean and affordable energy, our country’s achievements are applauded. While there is progress in moving towards more environmental sustainability, the Country Report says that more work is needed to improve this within communities and urban centres. This is something that the Labour manifesto acknowledges and allocates an unprecedented €700 million investment for this purpose.
In this context, the European Commission also has words of praise for Malta’s Recovery and Resilience plan, describing it as ambitious and that it will lead to success in our country’s environmental and digital transition. This is the same plan that was described as a mess (froġa) by the Leader of the Opposition, Bernard Grech.