Symposium on competitiveness and medium-term challenges in small open economies

The Central Bank of Malta hosted a symposium on Competitiveness and medium-term challenges in small open economies on 16 June, with a special focus on the challenges of Brexit.

During the first session of the symposium, Deputy Governor Alfred Mifsud launched the bank’s latest research publication, Challenges and opportunities of sustainable economic growth: the case of Malta. The publication examines Malta’s recent economic performance and evaluates future challenges and opportunities.

Dr Aaron G. Grech, the bank’s Chief Economist and chief officer Economics, outlined the research publication and its main results. In its first part the publication assesses the Maltese economy’s medium-term growth potential. This is followed by an analysis of the sustainability of recent trends in public debt and the current account. The final part assesses whether macro-financial developments are in line with fundamentals.

The second part of the symposium, introduced by Deputy Governor Alexander Demarco, discussed the medium-term challenges facing small open economies. Dr Ardo Hansson, Governor of Eesti Pank (the central bank of Estonia), discussed the recent economic development of Estonia in the aftermath of the global financial crisis.

Dr Mario Vella, Governor of the Central Bank of Malta, presented his assessment of the Maltese economy. The Governor explained that the bank’s study on the sustainability of Malta’s economic growth model provides very reassuring results.

There appears to be no evidence that the acceleration in economic activity was fuelled by growing imbalances in Malta’s fiscal or external accounts. Growth seems to be the result of better use of available factors of production and reflects structural improvements.

He stressed the importance of ongoing improvements in the effective utilisation of resources and productivity for the generation of buoyant economic growth.

The final part of the symposium dealt with the challenges of Brexit for small open economies with close links to the UK. Noel Rapa, senior Research Economist at the Central Bank of Malta presented the results of his study on the impact of Brexit on the Maltese economy, while Professor Karl Whelan, head of the School of Economics of University College Dublin, discussed the competitiveness of the UK economy following Brexit.

The publication, Challenges and opportunities of sustainable economic growth: the case of Malta, is available on the Central Bank of Malta's website www.centralbankmalta.org