3 weeks ago


Malta Business Review

Malta Business Review ECONOMIC REPORT The International Monetary Fund (IMF) had high praise for Malta, saying its economic growth remained one of the strongest in Europe, but cautioned that sustained efforts are needed to safeguard the financial system’s integrity. IMF RATES MALTA’S ECONOMIC OUTLOOK AS ‘FAVOURABLE’ Following the 2017 Article IV consultation, the IMF said that Malta’s favourable economic conditions and sound policies, had advanced structural reforms and supported the strengthening of private and public balance sheets. “Output is estimated to have expanded by 6.8 per cent in 2017, accompanied by dynamic job creation, which brought unemployment to a record-low. Strong inflows of foreign workers and rising labor force participation kept wage pressures contained in most sectors, thus contributing to low inflation despite a positive output gap.” The IMF also remarked that the rapid economic expansion and the growing population have put pressure on physical infrastructure and resulted in a continued housing market appreciation. “The fiscal balance is estimated to have registered a surplus for the second consecutive year in 2017, thanks to buoyant revenues—including from Individual Investor Program proceeds—and contained capital expenditure growth. The 2017 current account is estimated to have remained in surplus, driven largely by a sizable balance of services.” “The outlook is favourable, with growth decelerating gradually and converging to about 3 percent over the medium term. Growth is expected to be driven largely by domestic demand, backed by rising incomes and historically-low unemployment while buoyant services exports will continue to sustain current account surpluses. Inflation is set to pick up gradually, reflecting an increase in import prices and tighter labor market conditions. Headline fiscal surpluses are forecast to continue and contribute to a further moderation of public debt.” The IMF commented that efforts were needed to ensure that fiscal policy is geared towards addressing the infrastructure challenges while avoiding unwarranted stimulus, while steps to advance balance sheet repair and strengthen the oversight of nonbank lending would enhance financial sector resilience. “Sustained efforts are needed to safeguard the financial system’s integrity. Robust implementation and effective enforcement of the Anti-Money Laundering framework is critical given the size of Malta’s financial sector, the fastgrowing remote gaming activity, and the high demand for the IIP. Continuing strengthening the collaboration between the competent supervisors and regulators, and finalizing the related National Risk Assessment would support these efforts.” Policy measures suggested by the IMF included targeted macroprudential limits for mortgages; closing data gaps on borrower characteristics would help to calibrate these measures effectively; aligning the tax rate on rental income with tax rates on other sources of income, and introducing periodic reviews of the scope and parameters of the IIP, including the minimum real estate investment or leasing values, to curb housing demand pressure. Sustained efforts are needed to safeguard the financial system’s integrity. It also suggested that Malta should focus on reducing the severe congestion by improving road quality and increasing the use of alternative means of transport, upskilling and reskilling the labour force to better align education with business needs, increasing female labour force participation further, particularly among older cohorts, strengthen innovation by developing research infrastructure, increasing the financial support for research and innovation, and improve links between academia and the private sector would enhance productivity and boost growth prospects. MBR Published on Malta Chamber 30th January 2018 Source: PKF Malta 42

SPORTS CONTRACT Malta Business Review Mapfre extends contract with Renault for Formula 1 After a positive first year of collaboration in 2017, MAPFRE has agreed to renew and expand its agreement with the Renault Sport Formula One Team. The Spanish insurance company will become one of the team’s main official sponsors over the next five seasons. The agreement, which was presented in a meeting between the Chairman and CEO of MAPFRE, Antonio Huertas and Renault Chairman and CEO Carlos Ghosn, goes beyond a sports sponsorship; it opens the door to MAPFRE and Groupe Renault exploring additional mobility solutions and services linked to the role of insurance in the future of the automotive industry. "This agreement with Groupe Renault will allow us to further promote the MAPFRE brand and its values worldwide," explained Antonio Huertas, Chairman and CEO of MAPFRE. “Formula 1 is not just a competitive sport - it is also a testing ground for technological research that can then be expanded to society as a whole. This philosophy fits perfectly with our strategic position for the future.” “Our relationship with MAPFRE has highlighted the reach and potential of Formula 1 and the team and this long-term partnership is an opportunity for Groupe Renault and MAPFRE to build new projects together. We look forward to continuing to push for our respective targets over the coming seasons,” added Jérôme Stoll, President of Renault Sport Racing. Mapfre also sponsors the tennis player Rafael Nadal, the Royal Spanish Tennis Federation and the Spanish team of the Volvo Ocean Race. MAPFRE is a global insurance company which operates across five continents and employs more than 37,000 professionals and services approximately 37 million clients worldwide. In Malta, it is represented by MAPFRE Middlesea and MAPFRE MSV Life. MAPFRE Middlesea p.l.c. (C-5553) is authorised by the Malta Financial Services Authority (MFSA) to carry on both Long Term and General Business under the Insurance Business Act, 1998. MAPFRE MSV Life p.l.c. (C-15722) is authorised by the MFSA to carry on long term business under the Insurance Business Act 1998. Both entities are regulated by MFSA. MBR All rights reserved - Copyright 2018 43

Luxembourg Business in the New Digital Economy -
National reform programme 2008-2010 Malta - European Commission
Latin America and the Caribbean in the World Economy 2016: The region amid the tensions of globalization
July - August 2012 -