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Malta's Economic Recovery Well Under Way, Says IMF

by Lorys Charalambous, Lowtax.net, Cyprus
17 November, 2015

Supported by tax reforms, Malta's economy is growing more strongly, the International Monetary Fund has said, with 5.1 percent economic growth reported in the first half of 2015.

The IMF said growth is expected to remain solid in 2016-17, driven initially by domestic demand and later by a gradual recovery in external demand. Key policies that have boosted Malta's prospects include further cuts to income taxes as well as efforts to increase female workforce participation.

The IMF said Malta's medium-term fiscal plans are appropriate, noting that the fiscal deficit declined to 2.1 percent of gross domestic product in 2014 and deficit reduction continued in 2015. Revenues have come in above expectation, and the authorities aim to achieve an overall surplus of 0.2 percent in 2018.

The IMF said that tax and spending measures beyond 2016 have not yet been fully fleshed out.

Turning to the financial services sector, the IMF said the banking system remains resilient; banks are well capitalized, profitable, and liquid. Solvency and liquidity of core domestic banks and other peer banks remain above the minimum regulatory requirements, and their profitability is above the euro area average. The IMF proposed reforms to generally bolster finance sector safeguards.

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