Issue link: https://maltatoday.uberflip.com/i/1534619
11 EDITORIAL maltatoday | WEDNESDAY • 123 APRIL 2025 GOVERNMENT finances are still a long way from turning into black but the latest National Statistics Office data paints an improving picture and a rela- tively strong position. In raw numbers, Malta ended 2024 with a deficit of €825.3 million. It is massive, especially when one considers that up until 2020, when the COVID pan- demic hit, Malta witnessed years where it registered a surplus in public finances. Nonetheless, the circumstances over the past five years have been determined, first by the pandemic, and then by the uncertainty and inflation caused by the Russian invasion of Ukraine. Analysing the figures with a fine-toothed comb shows that the 2024 deficit represents an improve- ment of around €150 million over the previous year. More significantly, it represents 3.7% of GDP, a full one percentage point improvement over 2023. A deeper dive shows that the end-of-year deficit as a percentage of GDP was also lower than what the finance minister had been projecting for 2024. Indeed, Clyde Caruana was forecasting a deficit of 4.5%, which makes the results even more signifi- cant. The finance minister on Tuesday said the down- ward trajectory in the deficit would mean that Malta could exit the EU's excessive deficit procedure two years earlier than expected. If achieved, it would be a feather in government's cap. EU member states are required to keep deficits at 3% of GDP or less. Aiming for a return to sur- pluses in public finances should be the ultimate goal even though this should be approached with caution amidst the current turmoil caused by the Trump administration's disruptive behaviour on world trade. But the deficit only tells one side of the story. The more important part is the debt-to-GDP ratio, which clocked in at 47.4% at the end of 2024, well below the 60% EU target. It is true that Malta's debt has been increasing steadily over the past few years to reach €10.6 bil- lion at the end of December 2024. But when com- pared to the size of the country's economy, the share of debt has been on the decline. This means that despite Malta taking on more debt as a result of certain policy decisions – the COVID wage supplement, the electricity and fuel subsidies and the creation of a new state-owned air- line – the increased burden was not one the country could not afford. Indeed, the finance minister has enough leeway to spend its way out of another catastrophic interna- tional crisis if push comes to shove. In this sense, Malta is in a much better position than many other EU countries that have debt-to-GDP rations signif- icantly higher than the 60% mark. Obviously, these positive headline figures also make sense in the context of an economy that keeps growing in a healthy way. So far, there are no signs of an economy that is expected to slow down dras- tically but nonetheless, Caruana would do good to keep a strong hand on the rudder. The strong position government finances are in should not be used as an excuse to play loose with accountability. Waste, abuse and corruption are ex- pensive and public finances could be in better shape if these are curtailed. Had the government acted in good faith in the hospitals deal, today, the health ministry would not be grappling with projects to try and increase bed space because new wards would have been available in Gozo's promised state of the art hospital and a refurbished St Luke's Hospital. Additionally, there are several multi-million-eu- ro projects that will require substantial public in- vestments over the coming years. These include the waste incinerator, a floating offshore windfarm, the second interconnector to Sicily and a hydro- gen-ready gas pipeline, the Gozo ferries, expansion of health facilities at Mater Dei Hospital and the construction of a new hospital in Gozo, and even- tually a mass transport system. These investments will require substantial outlays over several years. Ensuring these projects don't get mired in corrup- tion and maladministration would be one step in safeguarding the public purse. Steady as she goes but finance minister needs to keep his hand on the rudder maltatoday MaltaToday, MediaToday Co. Ltd, Vjal ir-Rihan, San Gwann SGN 9016 MANAGING EDITOR: SAVIOUR BALZAN EXECUTIVE EDITOR: KURT SANSONE EDITOR: PAUL COCKS Tel: (356) 21 382741-3, 21 382745-6 Website: www.maltatoday.com.mt E-mail: dailynews@mediatoday.com.mt basic fairness. Some have voiced concerns that a focus on digital might sideline other essential skills. But this is not the case. A well-designed digital strate- gy supports not replaces core competencies like reading, writing, reasoning, and crea- tivity. Technology, when used well, enhances the human as- pects of education. It frees up time, increases flexibility, and opens up access to knowledge in ways that were unthinkable just a decade ago. The Digital Education Strat- egy 2025–2030 is the right move at the right time. It gives Malta the tools to prepare not just students and teachers but the entire country for a world where digital fluency will de- fine success. The country is not stepping blindly into the fu- ture. It's stepping deliberately, with its eyes open and its goals clearly defined, because this isn't about following a trend but about leading with pur- pose. Parents are part of this, too. With proper guidance and support, they'll be better equipped to help their children navigate digital spaces safely.