Billions required to work on infrastructure, hoteliers warn

Following the news of a budget surplus, MHRA president Tony Zahra urged the government to invest in infrastructure to convert the island into a “22nd century smart island,” in order to avoid a “drag” in private investment.

The National Statistics Office announced on Thursday that the Consolidated fund had registered a surplus of €8.9 million surplus for 2016.

Prime Minister Joseph Muscat, who said the surplus was reached without having to resort to any austerity measures, hailed the news as “Maltese economic miracle,” pledging to ensure that it would not be a one-off.

"Our priority is to ensure this will not be a one-off, but a trend which we need to sustain over the coming years," Muscat said addressing a press conference at Castille.

In welcoming the news, the MHRA said that the surplus came on the back of a substantial increase in economic activity, including tourism.

However, Zahra said that the next step was to “turn the island into a 22nd century smart island” and that this required “billions of euros in infrastructure costs.”

“Malta must now find a financing model to fund the billions of euros in infrastructure costs which is needed to turn the island into a 22nd century smart island. Without this investment, there will be a drag on private investment which will keep the island from making the leap into a regional leader of the stature of Singapore,” Zahra said.

He also warned that while the government has produced continuous expansions in the economy, it must be weary of expansion in government recurrent expenditure, claiming “it is already far beyond what it should be.”

“This is the time to register substantial surpluses, so as these can be made use of when the economic cycle becomes unfavourable, which will happen sooner or later as this is the way economies work.”