“Malta Budget 2024…”

MALTA BUDGET 2024

–         In 2024, Government will be spending another €350m on energy and fuel subsidies

–         Government aims to keep public debt below 60% threshold

–         COLA for 2024 will be €12.81 per week

In the coming years, the challenges brought about by climate change, energy and inflation will continue to affect global affairs, which is now exacerbated by what is happening in the Middle East, Finance Minister, Clyde Caruana, said in the budget speech.

Experts are predicting a weak global economic increase when compared to the past. According to the International Monetary Fund, economic activity is forecast to decrease from 3.5% in 2022 to 3% in 2023 and 2.9% in 2024.

This reflects a moderate increase in global trade. It is anticipated that advanced economies such as the US, Japan and the UK will be facing a drop in their growth because of inflation and monetary policy. In these economies, the IMF is predicting a reduction in growth from 2.6% in 2022 to 1.5% in 2023 and 1.4% in 2024.

In spite of all that is happening, and this also includes the war in Ukraine, Malta registered a steady economic growth, a decrease in the poverty rate, an increase in employment, a decrease in unemployment and a stronger participation in the employment sector, Caruana said.

Next year, the Government will be spending another €350 million on energy and fuel subsidies, Caruana said. This means that the Maltese public will not see any rise in the cost of energy and fuel until the end of 2024. If the price of fuel is not subsidised, the price of diesel would be €1.91 per litre instead of €1.21. A driver who spends €20 a week would have to spend €32 if the subsidy was not given, for a total of €624 per year. The price of petrol would be €1.94 per litre instead of €1.34. A driver who spends €20 a week on petrol would be spending €468 more per year, without the subsidy.

Next year, inflation is projected to go down to 3.7%, as the increase in the price of food and services will continue at a more moderate pace. The Cost-of-Living Adjustment will be €12.81 per week.

The Government is committed to reduce the deficit by 0.5% per year over the next four years, so as to put Malta in conformity with EU regulations. If this happens, Malta would have been able to reach the 3% deficit goal by 2027.

Public debt will be 52.8% in 2023, and will rise to 55.3% in 2024, which is still lower than the 60% criteria. The Government is committed to keep public debt below the 60% threshold.

BUDGET 2024: Government wants to create a Centre of Competence in the semiconductors sector, also targets aircraft leasing sector

–         Malta to host EU Start-ups Summit for next three years

–         SME complex planned for Ħal-Far

–         €215 million to be invested in new national airline next year

The budget contained a number of measures for start-ups. The Government mentioned, for instance, that the Seed Investment Scheme, which offers incentives in the form of tax credits to Maltese companies after they would have invested in start-ups and passed through due diligence, will again be relaunched next year.

The Budget also reads that Malta Enterprise concluded negotiations with the EU Start-ups Summit, which for the first time will be held in Malta during 2024, 2025 and 2026. In the coming years, Caruana said, the summit is expected to attract 4,500 participants, as over three years.

The iStartup Finance Scheme will also be extended for another year. “This, aside from the launch of a consultation document regarding a legal framework to simplify the lives of start-up businesses, in particular the more innovative ones.”

As for businesses in general, among the schemes which are being extended, are the iSkills Development Scheme, the Rent Subsidy Scheme, the Innovate Scheme, the Smart and Sustainable Scheme and the Investment Aid for Energy Efficiency Projects, as well as an assistance scheme for SMEs to receive consultation services regarding ESG.

A number of workshops on the Green Transition will also be organised.

Aircraft Leasing

The Government is working to facilitate the financial infrastructure to strengthen aircraft leasing, the Minister said. “For this to happen, we need to work on amending the relevant laws, prepare a specialised framework for depreciation and attract banks that offer a complete service in order for them to back this initiative.” He said that Malta already has professionals working in this sector and he believes that the country can establish itself in this sector, and that by the end of next year it would be able to also attract new investment.

Sustainable Finance

The Minister announced that a consultation on fiscal incentives for investors to make sustainable investments will be launched.

Tourism

As regarding tourism, the Minister made a number of pledges, such as saying that the Government will continue working to improve tourism infrastructure, continue advertising Malta abroad and sustain air connectivity to the island. “We will be taking decisions through which we will improve the services offered across the spectrum of the hospitality sector.”

Regarding Gozo, he said that the Government will continue with incentives for more collective investment to improve the Gozo tourism product. He also said that investment in promotion will continue to increase, and will sustain the Extended Stays in the low season, as amongst other things.

National Airline

He also mentioned the new national airline that will launch operations next year, after Air Malta closes down. €215 million capitalisation will be invested in the new airline, so that on 31 March it will start operating.

EU funds for businesses

Opportunities for cash grants, through a €40 million investment for SMEs under the Business Enhance scheme will be offered, he said. Amongst other things, the INVEST EU financial instrument will continue offering support to SMEs by facilitating access to financing from local banks in the form of reduced interest rates and collateral requirements.

The Government is also making preparations for the implementation of Sustainable Urban Development through €58 million in European funds, of which the initiatives and actions taken will all be focused on Gozo.

The Government will also be launching a socio-economic study to identify the localities and zones with special regeneration needs. These localities will be given priority when it comes to infrastructural investments, community projects and urban greening. In addition, companies and businesses in these areas are to be given more generous grants, especially when it comes to renovating buildings as well as creating quality jobs.

APS Bank announces early closing of its Bond Issue

With reference to its issue of 5.8% unsecured subordinated bonds 2028–2033 opening Monday 30 October 2023, APS Bank plc issued a company announcement on Sunday 29 October informing that it will be closing the Offer at 15.00 of the opening day. This decision was taken based on preliminary information received from Authorised Intermediaries and indications shared by them. The Bank added that all applications received by the closing time will be processed, and a further company announcement with details of the Allocation Policy will follow in the coming days.

Marcel Cassar, APS Bank CEO, commented: “Similar to our 2020 debut bond issue and again our equity IPO last year, we are compelled to close major capital markets offer practically at the opening. By Saturday the feedback to this Bond Issue was indicating an overwhelming response and the decision to announce an early closing was taken in the interest of managing the expectations of all applicants, and of the market in general. We are once again most grateful for the trust and support being shown in the future of APS Bank”.

Malta Company Announcements:

Bank of Valletta plc

Bank of Valletta announced that the board of directors decided to distribute a net interim dividend of €0.03 per share, subject to approval. Shareholders of BOV as at close of trading Friday, 17^th November, will be entitled to receive the dividend payable on Wednesday, 6^th December.

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