Public finances: the big picture

Robust public finance management systems are the foundations on which a sustainable economy must be built. The improvement over the past three years is impressive. However, a balanced review must look at the broad context and other factors that matter for the wellbeing of Maltese society.

Malta registered a budget surplus for the third year running thanks to economic growth significantly better than that of most EU Member States. Public debt has also fallen to 46 per cent of GDP from 70 per cent just a few years ago. Investment in infrastructure has been stepped up mainly to improve the creaking road network.

Finance Minister Edward Scicluna must be commended for keeping a steady hand on the rudder of public finances. He is also right to warn that the economy needs to slow down in the coming years because of infrastructural bottlenecks. What is less commendable is the lack of clinical analysis of the big picture, the backdrop to the country’s economic performance.

International institutions like the IMF, European Commission, rating agencies and Council of Europe have raised questions about the sustainability of the elements that drive the Maltese economy. This concern is not...