A summary of the key fiscal and economic points of Budget 2018
Malta has continued to build on the success of previous years, posting an exceptionally strong economic performance, with real GDP growth of 5.5% in 2016 and 6.3% to June in 2017. This is coupled with strong employment figures, including a 3.1% increase in female participation in the work force with unemployment reduced to just 4.1%, and a total increase of some 9,500 jobs across the board, 8,500 of which are in the private sector. On the back of this economic growth, public debt decreased to 57.6% of GDP for 2016, and is projected to further decrease to just 50.8% of GDP in 2018 as a result of the continued budget surplus and economic growth, while inflation has been contained and remains stable at around 1.2%.
In this year’s budget, the Government has chosen to renew its focus on the themes of social justice, with a special focus on the housing market, as well as addressing the various infrastructural issues being faced as a result of the country’s strong economic expansion.
On the theme of social justice, the government has announced the introduction and/or extension of the following key measures:
In relation to Malta’s infrastructure, the government has presented a plan to continue improving the quality of product Malta, both for those who live and work here as well as for the record numbers of tourists who choose to visit. The various measures announced include the following:
While the opening tenet of the Hon. Minister Scicluna’s budget speech was the commitment not to announce any tax rise, either direct or indirect, a commitment which was honoured, various fiscal measures were announced, including:
One would also be remiss should one fail to mention the Government’s repeated emphasis of its vision for Malta to become a centre for excellence for blockchain technology with initiatives in this area including:
Overall, the budget clearly sought to consolidate that which was working, whilst gearing additional government expenditure towards addressing those areas which have been placed under strain, redistributing wealth to those in need and setting out a plan for continued incremental step improvement in all other areas with a special emphasis on adoption of blockchain technology.
© 2017 KPMG, a Malta civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.