Maltese not optimistic about country’s economic prospects
The European Union’s regular Eurobarometer survey has found that at least 46 per cent of Maltese citizens expect the economic situation in the country to deteriorate in the next twelve months, confirming that the Maltese are not optimistic about the short-term prospects of economic activity in the country.
The report examines the results of a public opinion survey held in Malta as part of wave 62 of the standard Eurobarometer. The survey was carried out during October 2004. An evaluation of trends in short-term expectations indicates that, in spite of high pessimism on the short-term prospects of the country’s economy, the large majority of Maltese believe that they will be able to maintain or improve their personal financial situation and the quality of their own life.
The survey results suggest that the Maltese believe, at a personal level, in their ability to overcome the challenges presented by economic restructuring in the country. This could also be a reflection of the growing importance being assigned to non-financial life domains, such as the quality of the environment, and the role of the EU in introducing higher standards to those domains.
However, 72 per cent of respondents believe they will be able to maintain or improve the quality of their own life during the next six months. According to the survey, although recognizing the important challenges facing the national economy, the Maltese appear confident that they will be able to safeguard their quality of life.
Still, only a fifth of respondents said they could foresee an improvement in the short economic term, which according to the survey reflects public awareness of the possibility of future fiscal austerity measures, given that the improvement of Malta’s public finances continues to top the government’s medium-term agenda.
In addition, concern over Malta’s competitiveness in international markets, in part fuelled by the closure of a number of manufacturing firms and hotel establishments, has grown considerably over the last year. Expectations on the employment situation in Malta mirrored those on economic activity, with 47 per cent of respondents foreseeing a worsening of employment prospects in the country.
Sixty per cent of Maltese respondents expressed uncertainty on their job situation over the next 12 months, in stark contrast to the majority of respondents in the other European Union member states who expect their employment situation to remain unchanged. Nevertheless, 54 per cent of Maltese respondents predict that the financial situation of their own household will remain stable in the short term, suggesting that respondents are confident in their ability to overcome the challenges of economic restructuring at a personal level.
Eighty-eight per cent of respondents who completed their education after the age of 20 said they expected the financial situation of their own household to improve or stay the same, whereas only 67 per cent of those who completed their education before the age of 15 predicted their financial position would get better or remain unchanged.
When comparing their present personal situation with that of five years ago, 43 per cent said their position had improved. An additional 29 per cent said that their situation was unchanged and 26 per cent said they believed it had worsened. The share of respondents claiming an improvement is somewhat higher for Malta than for the EU-25, suggesting that, although the level of economic development in Malta remains less than the EU average, Maltese living standards could be converging to those in the EU.
Participants in the survey were asked for their opinion on what they considered to be the two most important issues facing the country. The state of the economy was identified as the most important challenge for Malta at present. This was followed closely by unemployment which itself is conditional on the prevailing economic situation.
Malta’s economy has indeed performed sluggishly during the last four years. Real GDP fell by 0.3 per cent in 2003 and grew by 0.6 per cent in the first nine months of 2004. Government’s efforts to place public finances on a more sustainable footing, including an increase in the VAT rate, have dampened growth in disposable income in the preceding year. Both the manufacturing and tourist industries face growing competition.
The survey results mirror Malta’s current phase of below-potential growth, but also indicate a high awareness of the considerable challenges facing the Maltese economy.
When compared to the 25 EU member states, Malta’s respondents placed more emphasis on the economic situation, but expressed less concern on the issue of criminal activity.
The immigration issue, which had been ranked in ninth place in the autumn 2004 survey, was considered the fourth most important issue facing Malta. Increasing concern on this issue is likely to reflect the influx of a relatively large number of illegal immigrants during summer 2004. When compared to the 25 EU member countries overall, Malta’s respondents placed more emphasis on the economic situation, but expressed less concern on the issue of crime.