While investment by Maltese firms has been highly impacted by COVID-19, with more than half of firms reporting that they are investing less, the urgency for investment to adapt to the new normal is increasing.
This was stated during a presentation of the annual survey conducted by the European Investment Bank (EIB). The results of the survey were explained during a webinar organised jointly by the EIB and the Central Bank of Malta (Bank).
The survey – carried out between May and August 2020 – found that despite the harshness of the crisis, perceived obstacles to investment were lower than the previous year, except for the prevailing general uncertainty and availability of finance. The EIB found that financing constraints were larger in the construction and infrastructure sector and for micro and small companies.
The survey also looked at the adoption of digital technologies and investment in climate change mitigation.
The EIB Group Survey on Investment and Investment Finance has been carried out annually since 2016 in all EU Member States – including Malta – and covers a sample of firms in the UK and the USA. The webinar held on Monday was one of a series being organised by the EIB in the Member States.
A presentation on the Maltese economy was made by the Bank’s Head of the Economic Analysis Department Rita Schembri.
The well-attended webinar was addressed by Minister for Finance and Employment Clyde Caruana, while the opening remarks were made by the EIB’s Vice-President Dario Scannapieco and the Bank’s Deputy Governor Sandro Demarco.
The Governor of the Central Bank Edward Scicluna chaired a panel discussion with key stakeholders involved in investment finance and business transformation. These included Mahmood Pradhan, Deputy Director, European Department, IMF, Josef Bonnici, Chairman of the Malta Development Bank, Rick Hunkin, Chair of the Malta Bankers’ Association, Marisa Xuereb, President of the Malta Chamber of Commerce, Enterprise and Industry, Paul Abela, President of the Malta Chamber of SMEs, and Andrea Clerici from the Rome Office of the EIB.
The panel discussion tackled some of the most salient aspects with regards to economic recovery, starting with the understanding that we should be looking at a ‘new normal’, rather than assuming that things will simply go back to the way that they were prior to the pandemic. The panelists stressed the importance of investment – particularly when it comes to digitalisation and climate change – and the strengths of Malta’s regulatory environment. There is no doubt that the pandemic is one of the biggest challenges our economy has faced. However, it was also clear from the discussion that one of the most important things was not just access to finance but to reassure firms that they could have the confidence which is a prerequisite for investment.
Commenting on the meeting, Prof. Scicluna stated: “We were fortunate to have had an excellent group of speakers from leading institutions in Malta, Luxembourg and Washington. Their perspectives of the post-pandemic period gave the meeting a number of insights on how to narrow the existing digital and green gaps.”