The €20 million in economic measures to businesses announced by the Prime Minister and the Enterprise Minister, as well as the voucher scheme which is set to be issued in the next few days, will result in a further 2.5% growth in this year’s GDP, according to an economic analysis seen by TheJournal.mt.
The various economic incentives in 2020 boosted economic activity by 5%, reducing the economic slow-down from a 12% slide to a decrease of 7%.
This kept Malta well above the EU average slow down, making it one of the best performers both in terms of economy as well as employment.
In 2021, Malta’s Government is projecting a further increase in the deficit levels taking a conscious decision to keep injecting life into the economy rather than retract to austerity measures.
This additional fiscal injection contrasts sharply with what had happened after the 2008 financial crisis. That time, Government had decreased the deficit from €256 million in 2008 to €198 million in 2009 to €157 million in 2010; a decline of nearly €100 million over two years. Instead, this time, Government finances shifted from a surplus of €50 million in 2019 to a €1300 million deficit in 2020 to a shortfall of more than €1,600 million in 2021.
The latest economic measures will give a final boost to the economy before the effective reopening of all economic activity. An economic injection estimated at around 2.5% of the GDP. The measures announced are split into immediate financial injection, with the re-issuance of the rent and electricity scheme as well as a one-off grant to businesses which will remain closed tomorrow, as well as longer term assistance to incentivise businesses to reinvest their savings.