Malta's
economy remains strong with an appropriate balance between lowering public debt
and sustaining economic growth, the International Monetary Fund has said.
The
IMF's executive board commended local authorities for implementing "sound
macroeconomic policies,", saying these had contributed to "strong
economic performance, robust job creation, low unemployment, and improved
public finances."
They
noted that Malta's economy was one of the fastest-growing in Europe and that
the country's banking system remained well-capitalised and liquid, "well
above the levels seen in European peers".
The
IMF's appraisal came at the end of its latest consultation with Malta, known as
an Article IV consultation. As part of an Article IV consultation, a team of
IMF economists visits a country to assess its economic and financial
developments and meets with key stakeholders from politics, business, unions
and civil society.
In its
executive summary, the IMF noted that as a small and open economy, authorities
should continue to strengthen competitiveness and bolster Malta's economic
resilience to shocks.
To
achieve fiscal targets, the IMF said, Malta had to enhance tax collection
efficiency and contain its fast-growing wage bill and spending on goods and
services.
Although
Malta's banking system was better off than that of many other EU states, the
IMF warned that protracted low interest rates, weak credit growth, legacy
corporate non-performing loans, and an uncertain external environment pose
challenges.
They
also warned that local banks' high exposure to the property market "could
lead to imbalances", and encouraged authorities to deploy "targeted
macro-prudential tools" to enhance resilience to property market
swings.
The
Malta Development Bank, the IMF said, could help support the economy by giving
SMEs access to credit, provided that such credit went to "viable
firms".
Continued
structural reform momentum had to be maintained, IMF directors noted, saying
that Malta had to keep introducing more women into the workforce, do more to
foster research and innovation and improve the efficiency of its
judiciary.