Alternattiva Demokratika the Green Party says Fitch warning is not to be underestimated. Prof. Arnold Cassola, AD chairperson said, “Fitch’s Malta downgrade confirms yet again AD’s concerns about the Maltese economy. The agency is stressing that the Government is focusing on revenue growth without embarking on concrete measures to reduce its expenditure. Of bigger concern is the reduction in income tax which further creates a hole in government finances.”
He added, “it is doubtful whether the Government deficit can be lowered to 3% of GDP by the end of this year. The Pre-Budget document clearly shows that domestic expenditure has declined resulting in loss in revenue from Customs/Excise duties,Licenses,Taxes and VAT.”
“Also of great concern is Fitch’s confirmation that Malta’s total public debt, including Enemalta and Government guarantees, amounts to a staggering 90% of GDP, in line with Spain, France and UK,” Prof Cassola said.
“AD insists,” he said, “that that the former Nationalist government’s and the present Labour Government’s misleading habit of quoting the total public debt at 74% of GDP (excluding Enemalta) is merely playing around with figures and is not realistic.”
“Forging ahead with an expansionary budget, after the former Nationalist administration had failed to respond to the fiscal deterioration of 2012, could cause greater problems to the state of Maltese finances,” concluded Prof. Cassola.