Issue link: https://maltatoday.uberflip.com/i/1114702
09.05.19 9 EDITORIAL BusinessToday is published every Thursday, the newspaper is a MediaToday publication and is distributed to all leading stationers, business and financial institutions and banks. MANAGING EDITOR: SAVIOUR BALZAN COORDINATING EDITOR: PAUL COCKS CONTRIBUTING JOURNALISTS: MASSIMO COSTA | LIAM CARTER BusinessToday, MediaToday, Vjal ir-Rihan, San Gwann SGN9016, Malta Newsroom email: bt@mediatoday.com.mt Advertising: afarrugia@mediatoday.com.mt Telephone: 00356 21 382741 BUOYANT domestic demand is ex- pected to sustain Malta's economic ex- pansion, placing the country at the top of the EU league table, the European Commission's spring forecast shows. Released this week, the forecast sees GDP growth in Malta moderate to 5.5% this year but remain well ahead of other EU countries. The forecast confirms that Malta's headline figures, including the deficit, debt and inflation are expected to re- main sound throughout 2019 and 2020, although the high surpluses recorded in recent years are set to decline. The commission's forecast also shows that the external surplus remains at historically high levels, due to the strong performance of the export-ori- ented services sector, particularly tourism and remote gaming. Tourism has been a key component of Malta's economic make up since in- dependence, taking a stratospheric up- ward turn over the past decade. It is an export industry that has very low import cost, which is why various administrations have always courted the sector. Last year, Malta received 2.6 million tourists who left €2.1 billion in the economy, according to the National Statistics Office. And yet, major operators in the retail sector are reporting fewer sales this year, when compared to 2018. This appears to jar with the Eurostat fig- ures released last Monday that show how the volume of trade in March in- creased by 1.3% when compared to the same month last year. The Eurostat figures also show higher trade volumes in January and February. Abigail Mamo from the GRTU tells Business Today that the statistics are not capturing the problem. The apparent incongruence between the numbers and what retailers are saying, requires a thorough study to determine, which sectors are feeling the pinch and why. There could be multiple reasons for the negative sentiment. Some operators may be feeling the pinch of increased competition from new shopping malls that offer custom- ers an array of options that also include entertainment. In this sense, outlets in certain local- ities may be feeling the squeeze more than others. Other operators may not have the pricing that is right, which pushes choosy consumers away. And yet, oth- er operators may be facing the pinch of online shopping, which is no longer constrained to the purchase of books, CDs and other knickknacks. There are consumers who purchase household goods over the internet, clothes, electronic equipment and a vast array of other products that are often bought at cut throat prices. This is having an impact on the brick and mortar outlets, which have to re-invent themselves to remain rele- vant. Although these are market realities where government intervention is not called for, the authorities must be vigi- lant against unfair competition. Retailers and importers have often complained of the backroom entry of consumer products for re-sale on the Malta-Sicily ferry. No taxes are paid on these goods putting bona fide im- porters and retailers at a price disad- vantage. But while the online shopping phe- nomenon can partially explain the de- cline in trade reported by shop owners, a more detailed analysis is required. The retail sector is a very important cog in the economy that requires at- tention and the government would do well to sit down with the operators to understand what the grievances are and act accordingly. The retail trade conundrum