October 22, 2018 / 8:22 PM / 25 days ago

Malta says expects to maintain budget surplus, strong growth in 2019

VALLETTA (Reuters) - Malta expects to register a fiscal surplus for the fourth successive year in 2019 and forecasts its economy to grow by 5.3 percent in real terms, Finance Minister Edward Scicluna said on Monday when he presented the Mediterranean island’s 2019 budget.

Maltese Finance Minister Edward Scicluna presents his government's 2019 budget at parliament in Valletta, Malta October 22, 2018. REUTERS/Darrin Zammit Lupi

Scicluna said the surplus in 2019 was projected to reach 1.3 percent of gross domestic product, including proceeds from a controversial scheme by which the country sells foreigners the right to Maltese citizenship.

Net of the proceeds from the scheme, the surplus will amount to 0.5 percent of GDP, the finance minister said.

The total surplus in 2018 is targeted at 1.1 percent.

“Our unofficial target is to achieve a surplus every year,” Prime Minister Joseph Muscat told reporters.

Scicluna said the debt-to-GDP ratio is projected to drop to 43 percent next year from 47 per cent in 2018.

He said the budget would not introduce any new taxes or tariffs, but revenue was still projected to increase by 8.4 percent in 2019, mostly as a result of economic growth.

He said the government was raising its expenditure by 8 percent, with most of the increase going on a major roads improvement programme.

Employment is projected to grow by 3.7 percent in 2019 while the unemployment rate is seen at 4.3 percent, similar to 2018. Inflation is forecast at 1.9 percent.

Earlier on Monday, Eurostat said Malta’s budget surplus of 3.5 percent of GDP in 2017 was the largest of any EU country.

Reporting by Chris Scicluna; Editing by Gavin Jones; Editing by Alison Williams

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