Malta posts first budget surplus in 32 years in 2016 as economy surges

Publication Date: Mar 30, 2017
 
By Reuters
PUBLISHED: 14:33 BST, 30 March 2017 | UPDATED: 14:33 BST, 30 March 2017
 
VALLETTA, March 30 (Reuters) - Malta posted its first budget surplus in 32 years in 2016 and its economy grew by 5 percent, its statistics office reported on Thursday in data welcomed as a "miracle" by Prime Minister Joseph Muscat.
 
The government said the results achieved would allow the euro zone's smallest state to move forward on important infrastructure projects including an undersea tunnel to the sister island of Gozo, 3 miles north of Malta.
 
"A deficit of 362 million euros ($388.3 million) in 2012 has been turned around by this government to a surplus of 8.8 million. We have broken the cycle of borrowing to finance annual deficits," Finance Minister Edward Scicluna said at a joint news conference with the premier.
 
Muscat said his government had fixed public finances without resorting to austerity measures, but Malta needed to maintain a prudent fiscal stance.
 
"This miracle should be sustained through responsibility. The worst thing we can do now is go on a spending spree," he said.
 
Recurrent revenues reached 3.8 billion euros in 2016, up from 3.6 billion the previous year, the statistics office said.
 
Total expenditure was 3.8 billion euros, down from 3.9 billion in 2015, mainly as result of lower capital expenditure and interest payments.
 
Malta's 5 percent growth in real gross domestic product last year was three times the European Union average, making it the fastest growing economy in the 28-nation bloc.
 
Almost all sectors expanded, with double-digit growth in agriculture and fishing (12.4 percent), the professional, scientific and technical and administrative and support sector (11.9 percent), and the information and communication sector (11.6 percent).
 
Unemployment hovered around just 2 percent. ($1 = 0.9322 euros) (Reporting by Chris Scicluna; Editing by Gavin Jones and Alison Williams)