• National Productivity Board

National Productivity Board

The National Productivity Board, set up in February 2019, diagnoses and analyses productivity and competitiveness in Malta. In Malta’s case, the Board falls under the remit of MCESD.

The analysis takes into account the euro area and EU aspects and addresses the long-term drivers and enablers of productivity and competitiveness, including innovation, and the capacity to attract investment, businesses and human capital.

It also addresses cost and non-cost factors that can affect prices and quality content of goods and services including those relative to global competitors in the short term. Such an analysis is based on transparent and comparable indicators. The Board will engage in the independent analysis of policy challenges in the field of productivity and competitiveness and assess the effects of policy options, making trade-offs of policy explicit.

The Board is composed of 11 members, comprising of a Chairperson and 10 other members. The Chairperson of the Malta Council for Economic and Social Development (MCESD) is ex officio and acts as the Chairperson of the Board.

The other 10 members comprise of a senior official nominated by the Minister for Finance, a member nominated by the Governor of the Central Bank of Malta, four members nominated by the workers’ organisations constituted bodies sitting in the Council, and four members nominated by constituted bodies representing national employers’ organisations forming part of the Council. The National Productivity Board is also tasked with the preparation of the annual report.

The Board fulfilled the objectives of the EU Council recommendation in relation to the National Productivity Boards, as well as the diagnosis and analysis of productivity and competitiveness-related developments in Malta and Gozo.

The MCESD will be organising a conference to present the findings emanating from the annual report to all stakeholders. I would like to conclude this introduction by congratulating Minister Carmelo Abela as the new Minister responsible for Social Dialogue, Sustainable Development and the Implementation of the Electoral Manifesto.

MCESD wholeheartedly thanks Minister Edward Zammit Lewis and Minister Aaron Farrugia for their sterling work and for their cooperation during the their previous tenure.

Executive Summary

PRODUCTIVITY IS A KEY FACTOR OF NATIONAL COMPETITIVENESS TO SUPPORT SOCIO-ECONOMIC DEVELOPMENT. THE AIM OF THIS REPORT IS TO DETERMINE MALTA’S COMPETITIVENESS POSITION AND TO IDENTIFY FACTORS THAT ARE DETERMINING ITS EVOLUTION.

This report analyses Malta’s productivity and competitiveness from the macro and meso-economic perspectives. It also assesses in further depth specific factors of economic competitiveness that determine Malta’s current economic performance and its position internationally, namely human capital, innovation and infrastructural conditions. The analysis of these factors leads to the identification of the needs and proposals of policy measures.

In recent years, Malta registered significant macroeconomic growth rates mainly owing to a strong performance registered in the services sector. While Malta’s open economy makes it relatively more susceptible to external shocks, the diversified economic structure strengthens the resilience in managing macroeconomic shocks. Malta’s progress in converging towards the European standard of living can be attributed to the buoyant economic performance and the expansion of its economic potential. In the labour market, the unemployment rate is at an all-time low whilst the participation rate is increasing.

Furthermore, the substantial increases in net exports in the services industry have contributed to a current account surplus position. Malta needs to ensure that the factors determining competitiveness, such as the real effective exchange rate and the quality of the business environment and infrastructure, are supported with a view to ensure that the progress recorded in recent years can be supported over the longer term.

Yearly Reports

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