‘Several elements contribute to heightened risk factors for Malta’s economy in 2020’ – JP Fabri

3rd January 2020 

Dr Fabri points towards uncertainty, coming from both external and internal sources, as increasing risk factors for Malta’s economy.

As Malta’s economy continues to register positive results, ARQ Group Director for Regulatory & Advisory JP Fabri, who is also an economist by profession, points towards a variety of trends expected to impact the Maltese economy in 2020.

On the external front, he remarks that various indicators in the global economy point towards a gradual slow-down and possible global recession. Malta “being a small open economy and highly vulnerable to global economic movements, Malta’s economy can be negatively impacted by a global economic recession”.

Internally, Dr Fabri points towards a series of challenges being experienced by Malta. As a result of the current political instability, Dr Fabri fears that reputational damage will have a negative impact on investor perceptions.

He describes challenges to the local banking sector as a result of pressure to carry out huge de-risking processes. “This might also impact the development of various ecosystems and the attractiveness for international business,” said Dr Fabri.

Echoing calls made by the Malta Chamber, Dr Fabri comments that “the future economy is going to be determined very much by a country’s ability to invest and promote research & innovation ecosystems.”

On the environment, Dr Fabri remarks that following Malta’s construction boom “it is now time to focus on protecting the environment whilst placing an emphasis on regeneration”.

He also highlights issues surrounding the island’s ageing population, infrastructure and property prices as areas which authorities should keep a close eye on as 2020 unfolds.

Rounding up his assessment of the year to come, Dr Fabri believes “that the unifying theme or dimension that captures everything is the need to think in terms of ecosystems and not silos. This is the age of connectedness and even policy-making and investments need to be connected to each other to ensure that synergies are exploited”.

He adds that “there needs to be a growing realization that the success of any economic sector depends not only on innovative laws and regulations, but on the robustness and deepness of its supporting ecosystems. Therefore, economic success depends on the availability of finance, banking solutions, human talent, institutions and infrastructure.”

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‘Several elements contribute to heightened risk factors for Malta’s economy in 2020’ – JP Fabri