2 min read
In the first quarter of the year, our country's economy grew by 3.9%. This is a rate greater than that predicted by institutions such as the Central Bank and the International Monetary Fund, as well as the growth rate observed in the rest of the eurozone, which is about five times lower. The Maltese economy grew at six times the rate in Italy and thirteen times the expansion rate in Germany. The driving force behind economic growth during the first three months continued to be domestic demand. In fact, almost half of the growth was due to higher household consumption. This reflected the fact that the highest amount of income for workers ever observed in history was recorded. This is as workers' income reached a record figure of €2.8 billion. This was more than 9% higher than the amount of income observed last year, with a quarter of the increase being the result of the new collective agreement for public service workers. In addition to the improvement in consumption, domestic demand also improved thanks to higher investment as well as an increase in Government spending. Our country's international balance of payments also improved over the past year. This was as exports increased by almost €288 million. This occurred despite the challenging international situation, with a slowdown in the global economic rhythm and tariffs imposed by the American Government. But in contrast to businesses in countries around us, Maltese companies are remaining competitive because they have not been burdened with high energy prices, while the Maltese Government is not imposing new taxes like other Governments are doing. Almost a quarter of the economic growth that occurred was due to the digital sector, while there was also an improvement in the activity of professional and administrative services, together with financial services. This while there was a very strong contribution from the hotel and restaurant sector, as a result of the strengthening of tourism, as well as in the retail sector, where domestic demand remained strong, unlike what is happening in countries around us where families are being hit very hard by austerity policies, with increased taxes and reduced social spending. Source: Government of Malta