The 2008 Article IV Consultation analyzes the promise of fiscal discipline and debt relief that has boosted investor confidence and growth in the Kingdom of the Netherlands—Netherlands Antilles. Although exports moderated temporarily, tourism was a bright spot owing to improvements in competitiveness as a result of infrastructure investments, and cost controls from immigration. Executive Directors encouraged the authorities to take the opportunity provided by the large debt relief from the Netherlands government under the dissolution agreement to set the budget and the economy on a more sustainable footing.
This 2008 Article IV Consultation highlights that Malta has experienced a three-year-long expansion reflecting strong foreign direct investment, export diversification, and value-added upgrading. Financial soundness indicators held up in 2007 despite unfavorable international developments. The banking sector’s liquidity and funding profile are healthy, and banks have remained profitable despite markdowns in security portfolios. Nonperforming loans fell further but are still comparatively high and thinly provisioned. The authorities are unbundling and opening to private participation the fuel and gas operations of the public energy company.