Robert Abela: Malta’s debt will remain sustainable at 60% of GDP despite energy subsidies
Prime Minister says Malta's debt-to-GDP ratio will remain around 60% despite hefty energy subsidies
Malta’s debt ratio will remain sustainable despite government’s pledge to continue supporting families with generous energy subsidies, Robert Abela said.
The Prime Minister said the debt-to-GDP ratio next year will still be below 60% as dictated by the Maastricht criteria and will only marginally increase beyond the threshold in subsequent years.
The EU relaxed its sustainability criteria when the pandemic struck to allow governments enough fiscal leeway to mitigate the impacts of the crisis. The criteria remain postponed for the time being. Malta is in a much better position than other Eurozone countries despite having spent billions to cushion the impact of the pandemic and now the Ukraine war.
Asked what would government’s threshold be to continue spending without raising taxes or cutting expenditure elsewhere, Abela said the debt projections are to remain in the region of 60%.
Speaking at a press conference after his finance minister delivered Budget 2023 in parliament, Abela said next year’s budget addresses the challenges faced by the country today, while paving the road to the future.
“Today because it addresses the challenges of the present, and the future because it gives people the certainty and stability to plan ahead,” he said. “We will remain a progressive force with a social soul.”
He said the budget is based on the Labour Party’s electoral manifesto, and looks to address the social needs of the people.
“Others tried to scare people saying taxes would increase after the election, but this was a budget with the largest capital spend in history… Despite a global energy crisis, Maltese families and business do not need to pay an extra 1c for these services. Other countries are debating whether to shutoff energy, we are offering assurances on the future for our families,” Abela said.
Addressing the country’s traffic situation and criticism that the budget fails to mention the metro, Abela said government has already implemented free public transport. However, he said more investment is needed in better traffic management.
He also said that the Luqa and airport junction projects, and the Mrieħel section of the Central Link project are not yet finished, causing disruption to traffic flow. Once completed they will contribute to better traffic management, he said.
When asked about the metro and the Malta-Gozo tunnel, Abela said studies are still ongoing for both projects. However, he said the tunnel project was not a government priority.