Malta Economy Should Out Perform the European Average
Posted: 13/05/2012 Filed under: Malta News | Tags: economy, EU, GDP Leave a comment »
Though the economic growth of Malta has slowed down when compared to last year, the Maltese economy is still expected to outperform the average in the EU27. This is according to a report from the European Commission for Economic and Financial Affairs which was published late last week.
The data shows that the economy in the European Union is currently in a mild recession and will likely contract by about -0.3% of the GDP by the close of 2012. However, for Malta, that forecast is not exactly true. By the end of 2012, the Maltese economy is expected to grow by 1.2% of the GDP and has a 2.0% increase expected throughout 2013.
Other information from the Commission includes positive forecasts in other areas of the Maltese economy as well. Inflation is expected to remain at about 2.0% through the rest of 2012 which is also lower than the EU average of 2.4%. There is also an expectation of increases in both imports and exports. However, not all of the news is rosy. The Commission is also expecting a slowdown when it comes to tourism for Malta compared to last year and are also expecting employment to slow down to 0.6%. In 2011, the employment rate was 2.4%.
When it comes to the finances of the government more debt is expected for Malta. Though the Commission agrees that the efforts of the government to lower the deficit to 2.6% of the GDP, debt for the island is expected to reach about 74.8% which is an increase of about 2.8% from 2011. According to the Commission, both the debt and deficit outcomes should be a bit higher especially due to the restructuring efforts of Air Malta. Other things that should be having an impact include the financial situation of Enemalta and the renewal of the public service wage agreement.
The Malta Property Market: Then and Now
Posted: 09/05/2012 Filed under: Living in Malta | Tags: economy, housing, property Leave a comment »
At one time, the Maltese property market was booming. Property was selling easily, both buyers and sellers were getting great value and investors and speculators were leading the charge. Today, however, the landscape has certainly changed, but not as much as many countries, which is one more example how Malta has shown perseverance through the bad economy.
Some experts claim that this is because Malta is a small, island nation and that there is just not enough land and property to stay empty due to the high population. Malta also has a culture that is focused on home ownership and combined with everything else, prices should remain stable.
There is really no denying that home prices have changed since the European crisis came into play and falling prices are everywhere, in both cities and small towns. Some, of course, have seen larger price drops than others which shows that location can definitely have an impact on housing prices.
The other good thing for Malta is that these stable home prices are good for the economy. When property prices fall too low, the owners will fall into negative equity. This means that the value of the home is less than what you owe on the mortgage. This is what happened in the US which is why their economy struggled throughout the past few years. Many owners simply stopped paying their loans and allowed the banks to repossess the property. Banks are not property developers and don’t want the homes on their books so they sell them off at a discount. This becomes a very vicious cycle and luckily, Malta is fairly certain to not have to be a part of it.
The housing market in Malta is still going strong when compared to other nations and this is something that we can all be proud of.
Maltese Financial Sector is Experiencing Continued Growth
Posted: 05/05/2012 Filed under: Business Setup In Malta, Malta News | Tags: banking, economy, finance Leave a comment »
According to FinanceMalta, the partnership that has been set up to promote Malta’s financial sector, Malta is well on its way to becoming a secure location in Europe for financial entities like fund managers, to make flexible arrangements for their operations. Malta joins the likes of Luxemburg, Geneva, Zug and Dublin who already carry this promising distinction.
Malta is currently showing growth in five separate areas of the financial sector. They are insurance, trust funds, banking, wealth management and investments. Each of these parts of the financial sector has shown solid growth throughout 2011 and is forecasted to continue this growth in 2012. FinanceMalta has been paramount in bringing the sector into this position and is currently in line with the Maltese government’s vision of where the industry should be.
FinanceMalta claims that the country is definitely establishing itself as a dynamic, effective and English speaking location in Europe that is in a great position to make an impact on the world’s financial sector. In the recent Global Financial Centres Index (GFCI) survey, the cities that are showing weak financial growth are continuing to slide downwards. Some of these include Athens, Milan, Madrid and Lisbon. Other cities that are showing financial potential, like those mentioned above, are slowly but surely showing growth.
Some of the things that go into the GFCI survey include transportation costs, office infrastructure and the opinions of financial professionals throughout the EU. There are also more volatile factors that are taken into consideration like the rise and fall of the Euro and the continuing effect of the European debt crisis.
FinanceMalta announced that the GFCI survey has listed Malta as one of the top 10 off shore centres for finance which opens up Malta for more competition in the EU. This could bring positive changes to the financial sector of the economy.
Eurozone Unemployment Rises Again, But Malta Holds On
Posted: 04/05/2012 Filed under: Malta News | Tags: economy, EU, unemployment Leave a comment »
Unemployment in the Eurozone has hit a record high in March according to the latest reports. Generally it is thought that this is due to spending cuts. When looking at the entire Eurozone, unemployment rose to 10.9% which is the highest since the Euro was introduced in 1999. Compared to March of 2011, when many people believed that the economy was at its worst, it was 9.9%. Looking at the 27 EU members, unemployment in March 2012 was not much better sitting at 10.2%. In March of 2011, the EU27 had an unemployment rate of 9.4%.
Malta is sitting as the sixth lowest when it comes to the Eurozone and for March, 2012, registered an unemployment rate of 6.8%. The lowest unemployment rate for March came from Austria where unemployment is at a very normal 4.0%. Other countries that are registering low unemployment numbers include the Netherlands at 5.0%, Luxembourg at 5.2% and Germany at 5.6%. The highest unemployment rate in Europe is Spain with a stunning 24.1% unemployment. Greece is not far behind at 21.7%.
When comparing numbers to 2011, eight members of the EU had unemployment rates that fell, which is promising, however 19 members of the EU had unemployment rates that rose. The largest increases from March, 2011 to March 2012 were Greece with an increase of 4.2%, Spain with an increase of 3.3% and Cyprus with an increase of 3.1%. Even countries that traditionally do well in the EU, like Italy, are seeing the highest unemployment rates in years. Italy has an unemployment rate of 9.8%, the highest since 1999. Italy, along with Spain, has already announced that they are back in a recession, known as a “double dip” to many economists.
Malta is still holding on to a relatively good economy and unemployment rate, but as noted by other countries in the area, this could quickly disappear.
Malta’s Relationship with Libya Could be Beneficial to the US
Posted: 03/05/2012 Filed under: Business Setup In Malta, Malta News | Tags: America, economy, Libya Leave a comment »
The long standing relationship that Malta has with Libya could be a great opportunity for American businesses according to Lorraine Harriton, US State Department Special Representative for Business. Harriton was visiting Malta in order to hold meetings with Maltese business leaders about collaborating and supporting American businesses in Malta. She said that due to the long standing relationship between Malta and Libya, American companies could easily work with both countries. This relationship would be a boost to the American, Maltese and Libyan economies. By using the strong relationship between the US and Malta, the US would be able to pick up more opportunities in Libya as well.
According to Harriton, the US is extremely grateful to Malta for all of the assistance that was given during the Libyan conflict and she said because of this, more American businesses became acquainted with Malta. American companies are becoming extremely interested in business opportunities in both Malta and Libya which would be positive for all through countries.
Harriton’s visit to Malta was part of a programme that the American business community is trying to get started. Gene Cretz, who is the US ambassador to Libya has also been involved in the programme. The focus for the US in Libya and Malta would be to bring companies like GE and Dow Chemicals into these countries. According to Harriton, aside from these energy companies, there may be plans to include other economic sectors as well. As an example, she mentioned the problems that Libya has with infrastructure. She said that many US companies are extremely interested in coming into the country and working on building roads, new buildings and making sure that everyone has water and electricity. After that, the plan would be to work on IT, telecommunication, tourism and retail. Harriton said that the US economy is growing and now is a wonderful time for all three countries to start a dialogue.
Maltese Tourism Niche Expected to Surge
Posted: 30/04/2012 Filed under: Living in Malta, Malta News | Tags: economy, Rock Climbing, Tourism Leave a comment »
Maltese tourism is always a hot topic when considering that it is one of the largest sectors in the Maltese economy. Though tourism itself is doing quite well, tourism niches, like climbing, are really starting to take off. After a visit from two of the world’s most well known climbers, more are expected to follow which could really help the economy.
The island has great potential to really catch the eyes of the climbing community after climbers Sonnie Trotter and Tommy Caldwell chose the area around Gozo to explore potential climbing areas. Corey Rich, a world famous photographer accompanied Trotter and Caldwell to Malta in order to photograph the climbers. The shots that were taken will be used in promotional material that will be focused on climbers throughout the world.
The excitement is really flowing through the climbing community here at home too since Malta has never really been noticed on the world scene before. However, now that Trotter and Caldwell have chosen Malta as a destination, more are sure to follow. Andrew Warrington of the Maltese Rock Climbing Club said that Trotter and Caldwell chose Malta on their own, which is a great testament to the wonderful climbing areas that the country has.
Warrington continued on by saying from 2005 to 2011, climbers coming to Malta rose by about 50%. In 2011, there were about 25 people per week coming into Malta solely for rock climbing. Once news this that Trotter and Caldwell chose Malta as a climbing destination, about 50 people have contacted Warrington about climbing opportunities which is phenomenal.
During their stay in Malta, these professional climbers discovered six new climbing routes around Gozo and after making four climbs, are planning to return to do the other two. They will also be exploring the area for more possible climbs.
Malta Considering Joining the Digital Gaming Industry
Posted: 27/04/2012 Filed under: Investment, Malta News | Tags: economy, Gaming, Industry Leave a comment »
One of the fastest growing industries in the world is the digital gaming industries and Malta is ready to join. In 2011, earnings for the global digital gaming industry rose by 10.4% over the previous year to reach US $74 billion. By 2015, it is expected to top US $ 100 billion and Malta wants to get a piece of this pie.
A Malta Enterprise spokesperson said that they are going to target the digital gaming sector and believe that it is the next natural step as they already focus on ICT and are also planning on focusing on biotechnology and life sciences, both booming industries in Malta. Even if they are only able to get a small share of these profits, it will make a big impact on the local economy in not only wealth, but also when it comes to employment opportunities.
The fear of Malta Enterprise is that they believe that the Maltese economy is becoming too dependent on moving up the value chain and diversifying the industries it is focused on. When the country is able to focus on more than one or two industries, Malta Enterprise believes that there will be a greater opportunity for economic growth.
The digital gaming industry has two major parts, hardware and software. Both of these have several industries that supply for them and with that many sectors of the economy, it would be ideal for Malta to step in and explore these options. Given that Malta has limited land and space for large factories which may be needed for hardware and manufacturing software, there may be a wonderful opportunity for Malta to get into the downloadable gaming market. This requires less space and smaller teams in order to be successful. The next step is to get serious about the prospects and to begin modeling the different ways that this could turn out for the Maltese people.
Central Bank Says that Malta Must Live Within Its Means
Posted: 26/04/2012 Filed under: Business Setup In Malta, Working In Malta | Tags: Central Bank, economy, Wages Leave a comment »
Based on news that the Maltese economy is slowing a bit, the Central Bank issued a report early this week indicating that Malta must live within its means in order to keep pushing the government’s debt down. President of the Central Bank, Josef Bonnici, spoke about the budget and during his speech reiterated the need for control of spending until the deficit is under control.
Listed projections indicate that the GDP could decrease to about 1.6% this year, which is down from 2.1% in 2011. Forecasts show that if changes are made and the deficit is reeled in, there could be some momentum which will take it back up to 2.0% by 2013. Additionally in 2012, the Maltese government debt is expected to reach about 69.4% of the GDP which is higher than the 60% mandated by the Maastricht criteria. Bonnici, during his speech, urged Maltese lawmakers to watch the debt situation very carefully and they should try to avoid any movement that would make the economy more difficult to adjust.
The Maltese economy has been held up by diversification and by adding new sectors, like the life sciences. There is a very sound banking system in Malta and borrowing is at a minimum. All of this is extremely helpful when attempting to get the debt down but there are still opportunities for the government to consider, such as some reforms, that could make this process even easier. Bonnici also mentioned the importance of wage increases that were supported by gains in productivity and urged companies to find new ways to compensate for the Cost of Living Adjustment (COLA) in order to help to control costs. He also said that the proposed raising of the minimum wage may not be the best thing for the country in this current economic state.
Maltese Debt Soars Due to EU Bailout
Posted: 24/04/2012 Filed under: Malta News | Tags: Debt, economy, Tonio Fenech Leave a comment »
The latest numbers are out for 2011 the final quarter of 2011 and the news is not great for Malta. Maltese debt soared in 2011 up to 72 percent of the economic output, largely due to the EU bailout of Greece and promised money to the EU rescue fund. However, as dismal as this news sounds, Malta was one of only 5 EU countries that showed a deficit that was 3 perfect, which still puts Malta as one of the most economically sound countries in the EU which is a great position to be in.
Tonio Fenech, Finance Minister of Malta, states that the fiscal obligations of Malta in order to help to bail Greece out, added 1.3 percent to the debt. Fenech says that this has accounted for the increase in debt from last year. In fact, for 2011, Malta showed a debt of €4.6 billion which was €350 million over 2010 and €1 billion more than 2008. Malta was one of the EU states that had a debt ratio that was higher than 60 percent of the GDP but again, still performed better than other nations including Italy, France, the UK, Ireland and Germany.
Mr. Fenech announced that this debt would continue to rise as long as there was a national deficit but he insists that the government is taking steps to balance the books and turn the deficit into a surplus. The deficit in 2011 was shown to have dropped 1 percent from 2010 and by about 2 percent from 2008. Fenech went on to say that this shows something is working and that Malta continues to have stability when it comes to the economy. He also says that this sends a very positive message to investors and that the deficit target was 2.2 percent for 2012.
Air Malta Revenue is Up Which Helps the Entire Country
Posted: 22/04/2012 Filed under: Business Setup In Malta, Malta News | Tags: economy, European Commission, flights Leave a comment »
New information has been released concerning Air Malta and it is excellent news for the entire country. Air Malta’s revenue rose by €3 million and expenditures dropped by the same amount in the past 12 months which showed modest improvement. This is according to Finance Minister Tonio Fenech.
Though the fiscal year for the airline was over in March, numbers were just released last week and are certainly encouraging for the Maltese economy, something that is on all of our minds. This information was announced at the Malta Fairs and Conventions Centre in Ta’ Qali which is open until today.
The improvement in Air Malta’s financial situation was attributed to the restructuring plan that they did, even though the plan was not approved by the European Commission. It is the hope of Maltese officials that the results of this restructuring, regardless of the solid increase in the cost of jet fuel, would convince the Commission that this plan is viable for the future. This comes after there were several objections to the initial plan by other countries concerning the restructuring plan. Finance Minister Fenech did admit that there are some legal hurdles to overcome, but he remained confident in the final outcome.
Agreeing with the Finance Minister is Air Malta’s chief executive Peter Davies, who states he is also very confident of a positive outcome from the commission and expects a final ruling sometime this summer. Speaking of the summer, Davies also announced that Air Malta was expecting to have about 1.2 million travellers this summer, which is significantly higher than last summer. Air Malta is also operating a very successful side business that charters flights which could carry approximately 100,000 passengers to and from Malta and both the UK and Israel this summer.
