EU predicts Malta's strong GDP growth to continue

Source: Xinhua| 2018-11-09 02:45:45|Editor: yan
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VALLETTA, Nov. 8 (Xinhua) -- Malta's strong GDP growth is set to continue, the European Commission's autumn forecast revealed on Thursday.

The growth is projected to gradually ease to an annual average rate of 4.9 percent in 2019 and 4.4 percent in 2020.

According to the report, domestic demand will be the main driver of the growth which supported by strong investment growth.

The report said that private consumption was set to remain dynamic in the background of increasing labour market participation and disposable income.

The current account balance is set to remain at historically high levels, underpinned by the large external surplus of the internationally oriented service sector.

The report said that the government surplus is expected to decrease to 1.3 percent of GDP in 2018 from 3.5 percent in the previous year, with an expected fall in earnings from Maltese citizenship contributing to this.

Next year, after incorporating the expected impact of the measures introduced with the 2019 budget, the fiscal surplus is expected to decline marginally to 1.2 percent of GDP.

Meanwhile,employment in Malta is expected to remain strong, but to moderate over the forecast horizon as economic growth eases.

Pressure to raise wages has remained contained despite strong employment growth and low unemployment ,which should remain at a rate of around 4 percent in the next two years.

Inflation is predicted to progressively rise over the forecast horizon, and should reach around 2 percent in 2020.