Malta tops competitiveness index for macroeconomic stability

Overall ranking remains 36th place

Malta in joint first place with 30 other countries for its macroeconomic stability in the 2018 index on competitiveness published by the World Economic Forum.

This was one of the performance indicators measured where Malta improved its score, along with ICT adoption. The score for its institutions went down marginally.

The country ranked in 36th place out of 140 countries reviewed by this year’s study, the same place as it did last year – when the index reviewed 135 countries.

Its aggregate points went up by 0.3 percentage points to 68.8.

The index also gave the Gini Income Co-efficient as being 29.4, where 0 is perfect income distribution, and 100 is perfect inequality.

The government welcomed the results, noting that Malta managed to surpass a number of key economies including India, the Baltic states, Cyprus and other countries.

"This is a positive achievement particularly in the light of the fact that the number of countries surveyed increased and the Forum has transitioned to a new methodology. The Forum said in a statement that about 60 per cent of the indicators used in the new index 'are brand new, as we increasingly believe factors such as workforce diversity, labour rights, e-government and disruptive businesses are driving competitiveness'," it said.

Economy Minister Chris Cardona attributed the result to controlled inflation as well as a budget surplus, and the government's focus on human capital.

"Recent initiatives from Malta Enterprise promote entrepreneurship and technological sophistication. We are also collaborating with MCAST to meet sectorial needs. Investing in broader measures of competitiveness today, including infrastructure, permits sustainable growth and income in the future,” he said.

There are a total of 98 indicators in the index, derived from data from international organisations as well as from the World Economic Forum’s Executive Opinion Survey. These are organised into 12 pillars.

The executive summary explained how the parameters had been tweaked to reflect the growing complexity of policy prioritisation by weighting pillars equally rather than according to a country’s current stage of development.

“The index contends that economies need to be holistic in their approach to competitiveness rather than focusing on a particular factor alone. A strong performance in one pillar cannot make up for a weak performance in another. For instance, investing in technology without investing in digital skills will not yield meaningful productivity gains. In order to increase competitiveness, no area can be neglected,” it warned.

“Each country should aim to maximise its score on each indicator, and the score indicates its current progress against the frontier as well as its remaining distance.

“This approach emphasizes that competitiveness is not a not a zero-sum game between countries – it is achievable for all countries.”

America topped the ranking in 2018, with a score of 85.6, beating Singapore into second place with a score of 83.5. Germany took third place with 82.8.

How Malta ranked

Institutions – 33 Infrastructure – 52

ICT adoption –24 Macroeconomic stability – 1 Health – 16

Skills – 35

Product market – 36

Labour market – 24 Financial system – 29 Market size – 119

Business dynamism – 66 Innovation capability – 34