Gulia insists economic growth ‘not reaching’ families

Gulia explained how the GDP growth in the first six months of this year was caused by higher profits in the financial sector, especially banks.

“These statistics need a more in-depth analysis because it looks like the banking sector has registered profits five times as much from those registered during the 2005 to 2007 period, which was the time before the global financial crisis erupted,” he added.

Gulia lamented that this did not happen to the income of families. “If one analyses thoroughly the figures, one will find that during the first six months of 2010, wages and salaries for families grew only by 0.1% in nominal terms, which means that in real terms, after factoring in inflation, salaries and wages of Maltese families continued falling by 1.1%,” he charged.

He explained that while the NSO figures purported that wages increased in the second quarter of the year when compared with the first quarter, “in fact wages decreased in the two quarters of 2010 when compared to the first and second quarters of 2010, which was the year of the economic crisis”.

Gulia explained that if Maltese families were really benefiting from some growth, then this sentiment would have been reflected in other economic indicators.

“For instance, the Government does not explain how the consumer confidence indicator published by Eurostat about Malta remained low to record levels,” he insisted.

In fact, growth in private consumption in the second quarter of 2010 was less than that registered in the first quarter of 2010. “This means that the further time passes, instead of feeling more hopeful to consume more, are further they are reducing their consumption because they are feeling that their financial situation is deteriorating, and this at a time when our country should have come out of the recession,” Gulia charged.

He also lamented that despite the fact that the NSO statistics were showing that the construction sector was recovering, “if there is a sector that has not come out of the recession, is exactly the construction sector”.

“While NSO now is claiming an increase in wages and profits in this sector of 7.8% and 14% respectively, the same NSO, through a press release 160/2010 issued less than 15days ago, said the opposite – that wages in this sector fell by almost 5%, jobs dropped by almost 10% and working hours plummeted by 12%,” Gulia charged.