Malta’s economic growth one of the strongest in Europe: IMF

Growth fro Malta. Photo by rawpixel on Unsplash
Growth fro Malta. Photo by rawpixel on Unsplash

In a statement released by International Monetary Fund, Malta has been lauded for its efforts in job creation and economic growth. “Prudent policies and reform efforts have contributed to the strengthening of private and public-sector balance sheets, while steady job creation has driven unemployment to historically low levels,” the IMF said in its statement available on the official website.

Although, the international body also pointed out certain challenges that the Island nation faces. “Growth prospects remain favorable, yet mounting pressure on infrastructure, rapidly rising housing costs, as well as shortages of labor and skills increasingly pose challenges. Improving infrastructure, reducing fiscal risks and enhancing labor supply are key policy priorities to sustain high growth and promote inclusiveness. Attention should also be given to safeguarding financial stability and integrity, including against the risks attached to new activities involving virtual financial assets,” it added.

The report also listed out four key recommendations. The first recommendation is to safeguard the financial integrity by “continuing the reforms and swiftly remedying identified deficiencies in the implementation of the anti-money laundering and countering the financing of terrorism (AML/CFT) framework.”

In addition, the IMF recommended that Malta should work towards guaranteeing long-term independence of the supervisor while enhancing the monitoring of the non-bank financial sector. Also, it highlighted the importance of measures to make housing more affordable for low-income families and also working on the provision of social housing.

“Shift the balance of expenditure towards infrastructure and contain long-term fiscal risks by addressing age-related spending pressures and further restructuring financially vulnerable state-owned enterprises (SOE). Improve public investment management and risk analysis. Continue to strengthen revenue collection and broaden the tax base,” it said.

Finally, the organization talked about the need to support a strong and inclusive growth by ensuring participation of women and elderly in the labor market. The need to expand the ambit of Research and Development (R&D) activities, promoting innovation, and financial access to Small and Medium Enterprises (SMEs) also found a place in the report.