According to Eurostat in March, Malta remained the country with the lowest rate of inflation among all European Union countries. Compared to the European average our country is seeing the cost of living rising by about half the median rate.
The country with the highest rate of inflation is Lithuania with an inflation rate of 15.6%, or three and a half times that in our country. In seven countries the annual rise in the cost of living exceeds 10%, or more than twice that in our country. The main driver of the rising prices is the surge in energy costs. On average, the utility bills faced by European households are 44% higher than they were in the same month a year ago.
In contrast in Malta neither the price of electricity nor that of fuel has increased because the Government is shielding consumers against the effects of the international crisis. In fact, 4.4% of the euro area-wide inflation rate is the direct result of the surge in the price of energy. This means that as a result of the Labour Government’s energy policy, families in Malta are facing a cost-of-living rise that is half that in the rest of Europe.
The main driver of the rising prices is
the surge in energy costs.
Meanwhile, in its latest World Economic Outlook, the International Monetary Fund (IMF) is forecasting that by the end of this year inflation in our country will be 4.7%, a slight increase on the 4.5% observed so far. On the other hand, across Europe inflation is expected to rise to 12.6% this year, before then falling to 7.5% next year. By contrast in our country inflation is forecast to nearly halve from 4.7% to 2.8%.
Price stability is undoubtedly one of the factors why the IMF is forecasting average growth of almost 5% for our country this year and next. By contrast in the euro area growth is forecast to be just over 2.5%, or half that of the Maltese economy. Even when it comes to the unemployment rate, IMF experts in their latest World Economic Outlook forecast see Malta reducing unemployment to 3.5%, or three percentage points lower than the euro area average.