Economic Consultant and Researcher Maria Giulia Borg has voiced concerns about Malta’s drive to achieve constant economic growth, noting that it is coming at the expense of other crucial areas within society.
Malta has enjoyed rapid economic growth in recent years, barring the height of the pandemic, and this is expected to continue, with real Gross Domestic Product (GDP) expected to increase from 2023’s 4.1 per cent to 4.2 per cent in 2024. In this respect, the debt-to-GDP ratio is set to amount to 52.8 per cent in 2023, going up to 55.3 per cent next year.
Speaking following the Budget 2024 presentation, Prime Minister Robert Abela said that Government’s formula remains one that prioritises increasing Malta’s growth, and the population then shares that growth “in a socially just manner”.
Ms Borg took issue with this statement, saying that Malta has enjoyed GDP growth for “quite some years now”, yet questioned whether it is being experienced in the form of “just and social distribution”.
Ms Borg is currently a Researcher in the social wellbeing field. Prior to that, she worked as an Economic Consultant for more than eight years, specialising in climate change and sustainability services.
She added that GDP growth has to be maintained, as Government seems to be on a “merry spending spree”, which has been described by Finance Minister Clyde Caruana himself as sustainable “as long as GDP growth increases”.
“No wonder we want to increase GDP no matter what! Seems like Government is cornering itself on this one,” she continued, given the increase in spending of Malta's Government, in terms of subsidies and handouts.
Speaking to WhosWho.mt, she said: "We have no other option but to grow exponentially."
This is necessary so that the debt-to-GDP ratio is kept low, given the increase in Government spending, hence prompting "panic growth and no long-term vision".
She explained that this is the case so that the debt-to-GDP ratio is kept low, given the increase in Government spending, hence prompting “panic growth and no long-term vision”.
Ms Borg stressed that Government’s objective seems to be to maintain this economic growth, “even at the expense of environmental degradation and migrant exploitation”. Whilst acknowledging the need and benefits of the local social security network, she aired the concern that the numerous bite-sized increases in financial support are resulting in an overall high Government spending, but an insignificant impact on an individual level, except for "seemingly making voters happy by receiving additional cheques in the post".
These handouts fail to have a "substantial impact" in terms of dealing with everyday expenses, she emphasised.
During the Budget 2024 speech, Minister Caruana confirmed that tax refunds, which cost Government over €26 million last year, will continue to be provided in 2024, utilising the same rates as in 2024. These refunds are distributed in the form of cheques, ranging from €60 to €140 in value, with the highest amounts being allocated to people with lower incomes.
Moreover, she holds the concern that Government is increasingly making low-income families dependent on its handouts, rather than "creating an empowering society through which individuals can help themselves out of poverty, whenever this is possible".
“I would rather see investments creating an empowering society whereby people can be independent," and whereby people are empowered to "get out of poverty, or not fall in it in the first place", she said.
Social image: Finance Minister Clyde Caruana delivering Budget 2024 speech live in Parliament / DOI / Omar Camilleri
Economic Consultant Maria Giulia Borg / LinkedIn