As all continue to face unprecedented times, with growing pressures on the country’s social fabric and economic performance, reaching some form of economic stability is critical, Farsons Group CEO, Norman Aquilina said when asked to give his reaction to the 2021 Budget.
“This is a challenge we have yet to overcome, more so in today’s highly volatile circumstances.”
The Government, he acknowledged, has a very difficult balancing act to perform because, in the longer term, it is compelled to retain a financially healthy and sustainable position.
Therefore, uncertainty within the country’s economic outlook is most likely to continue for the foreseeable future, he predicted.
He welcomed the extension of the wage supplement to March 2021 as it will help companies like Farsons to partially offset the incremental non-productive costs incurred following the drop in the Group’s turnover.
“The wage supplement’s five-month extension is, indeed, an important fiscal measure for the forthcoming depressed period, which will reinforce decisions to retain trained and valuable employees despite the lower consumption levels,” the CEO asserted.
On the other hand, Mr Aquilina cautioned, financial planning cannot be limitedly calculated on a five-month basis and, as the economic challenges resulting from the pandemic are expected to have a longer term effect, in the absence of further supporting measures, businesses may eventually be compelled to re-evaluate.
He pointed out that, to date, consumer behaviour is still settling into a new normal as more people learn to live with the reality of COVID-19.
“Consumer sentiment continues to reflect the uncertainty of the COVID-19 crisis, with confidence remaining muted and spending intent still below pre-crisis levels… So, when one looks at the measures introduced in the Budget, specifically those aimed at improving consumers’ income levels, whether collectively these measures are enough to boost consumers’ confidence and spending remains questionable,” Mr Aquilina concluded.
This is an extract of a feature first carried in the October edition of The Malta Business Observer