Government will shield country from shocks in energy prices, PM tells EY conference

The government is committed toward protecting the country from shocks in energy prices, Prime Minister Robert Abela said on Wednesday.

“In view of the grave risks posed by the current international conditions, we are committed to support the economy and shield it from shocks in energy prices,” the Prime Minister said, while speaking at the EY Malta "Future Realised" conference.

Sharing insights on government’s budgetary plans, Abela said government will continue social support measures aimed at improving the country’s welfare system.

He also said government will strive towards preserving the country’s fiscal sustainability, and reduce its deficit by 0.5% annually, till the 3% deficit target is reached, whilst keeping the debt ratio below 60%.

“We want to strengthen our economy by continuing in investing to ensure we have an adequate supply of skills, manpower, knowledge and capital to grow our economy sustainably,” Abela said.

Speaking about the challenges faced by country over the past four years or so, he said government has faced an array of challenges.

“In rapid succession we have had to face domestic political uncertainty, a pandemic, greylisting, an unprecedented spike in energy and commodity prices, the effects of the Ukraine war and now the escalation in the hostilities in the Middle East,” he said.

Despite these challenges, Abela said the economy is 15% larger than it was in 2019, 40,000 jobs have been created, and the number of graduates in employment in Malta increased by 17%.

“In 2023, our unemployment rate FELL further to 2.5%, the lowest in history and for the first time also the lowest in the EU,” the PM said.

He said Malta’s “superb economic performance” can be attributed to several factors. “Amongst them is the fact that we had at our disposal an economy that was nimble and dynamic. During preceding years, we had been careful to accumulate a good stock of financial resources which we were able to deploy, ensuring that our economy kept on delivering despite all the shocks around us.”

Abela said he is aware of the business community’s calls for investment into the country’s physical infrastructure and to help it address labour shortages. “These are challenges we will not shy away from.”

The PM said the reform of the taxation system can be an opportunity to take “bold decsions for the future of the country.”

“The EY attractiveness survey confirms that most investors see our current tax system as one of the key strengths of our business model.  Rest assured that with the reforms that we will be conducting, you will still feel the same – or possibly better, making it competitive within a modern-day global economic reality. We have worked very closely with all stakeholders to ensure that our tax system will become even more effective and provide more targeted incentives for investment in physical and human capital,” he said.

Metsola: Connectivity is key to Malta remaining competitive

The President of the European Parliament Roberta Metsola said that for Malta to remain competitive, connectivity is key. She said that connectivity should be considered in strategic terms, and not only from a commercial point of view.

“It affects the type of tourism that we attract, with whom we do business, the quality of life we want our citizens to have,” she said.

etsola said that in an ever- changing and increasingly geopolitical world, both Malta and Europe should focus on how to remain competitive.

President of the European Parliament Roberta Metsola

“How we can create higher value added jobs and futures with dignity. How we can ensure that the digital and green transitions make it easier for our companies to innovate,” she said.

She stressed that the answer for this is real, sustainable, economic growth.

Focusing on how Malta can be competitive during the coming years, Roberta Metsola said that connectivity is “how we can incentivise new and higher value added economic sectors. How we can invest in research and development that will place us way ahead of the curve. An education system that breeds a skilled work force that is able to cater for tomorrow’s jobs. How we can enhance the country’s infrastructure, from an energy system that can serve its population in an age of digitalisation, to an effective waste management plan and a traffic management system that doesn’t just make travelling more efficient but that also mitigates our impact on the environment.”

President Metsola said that it all boils down to infrastructural investment and political will. “A vision of excellence for our country,” she reiterated.

“We need to recommit ourselves to the fact that quality matters. Mediocrity has no place in our strategy for the future. Credibility is the cornerstone for a strong economy and a reliable country - a trusted partner - on the global stage. Excellence must remain the only acceptable standard.”