Malta’s GDP is likely to shrink by 10% this year as a result of the coronavirus outbreak, Finance Minister Edward Scicluna said in Parliament this afternoon.
Scicluna was speaking during a sitting devoted to discussion on the aid package launched by the government to address the economic impact of the outbreak.
The minister said that in light of the extraordinary circumstances, there were no economic models to build predictions on; one could only look at possible scenarios which can arise. However, he said that the most likely scenario would see Malta’s economy only start to recover in the fourth quarter, and that the best estimate would be a 10% contraction.
“This is an international crisis whose impact is still unknown. But we know that it will be negative, and very much so,” Scicluna said.
Fresh EU crisis expected
The minister observed that the more precautions one took, the bigger the economic impact, and that it was not easy to strike a balance between economic concerns and public health. However, he said that he was sure that the public would put individuals’ health above the economic impact.
Scicluna added that apart from the direct impact on Malta, the country would also have to deal with an EU-wide crisis, as many countries would be pushed to the brink of bankruptcy. Perhaps predictably, he then stressed the importance of the budget surpluses registered by Malta in recent years.
“We will not be talking about a surplus anymore, but the fact that we have registered one year after year leaves us in a stronger situation,” he said.
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