Malta’s economy to grow just 0.7% in 2009, unemployment to soar to 7.4%, says Commission

The economy is exppected to grow by just 0.7% after that it grew by 2.1% in 2008, said the European Commission today in its economic forecast for 2009.

Unemployment in the southernmost state of the EU is expected to top 7.4%, up 0.9% from 6.5% in 2008.

Deficit is however expected to decrease to 2.6%.

A detailed report compiled by the Commission shows that consumption shall fall while tourism is set to falter in 2009, the export market of semi-conductors, which constitutes the lion’s share of Malta’s exports, shall also take a hit this year. 

When treating inflation, the Commission points out that the Maltese will expect lower food prices in 2009, but the increase in water and electricity rates is set to push inflation, limiting its downward push.

‘The severe economic downturn will have a profound impact on labour market developments and public finances’, said the Commission as it predicts that the European economy will fall by 1.8% during 2009.

The Maltese Government had forecasted a growth of 2.5% in its last budget, presented in November 2008.

This means that with the worsening of the global situation, the European Commission is now expecting Malta to grow much less than it had predicted just less than two months ago.

The Italian Job – Fiat in talks with Chrysler

Italian carmaker Fiat is in talks to buy a stake in Chrysler, Il Sole 24 Ore reports.

Bank posts biggest loss in British history

CNBC just announced that Royal Bank of Scotland, one of the major banks in Britain, has posted a $30 billion loss for 2008.

This is the biggest loss in Britian’s corporate history.

“If the banking system collapses, every single one of us would see the obvious problems. The economy would come down with it,”  said Alistair Darling, Britian’s Chancellor of the Exchequer.

This news comes as the UK government prepares to take over as much as 70% of the bank in a bid to rescue it. This is part of a £300bn rescue package that was announced this morning.

Some sectors of the press are however already doubtful whether this second bank bailout will be successful.

Professor Peter Spencer from York University however argues, “We must not lose sight of the fact that they [bank bailouts] have prevented the collapse of the monetary system.” Were this to happen, this would spell disaster for the whole global economy.

Ambrose Evans-Pritchard however states that “this does not mean that recovery is imminent’.

I do not envy anyone who has to deal with this financial mess.

Economy and democracy take a hit in Singapore

Desperate times call for desperate measures, says a friend of mine. Singapore’s senior minister Goh Chok Tong seems to agree.

The Financial Times in fact reports that the southeast Asian state is ready to tap into its cash reserves in order to fund investment into the economy. Singapore’s economy is expeced to go down by 3% this year.

However,  the artcle also reports that the government is also prepared to tighten laws making public protests a criminal act in a bid to curb efforts of a major Singapore opposition party.

This is shameful. You do not invest in the economy while dvesting people of their freedom of expression.

It is time civil society and states speak out in favour of democracy in Singapore.

Tesco starts tweeting

British retail giant Tesco started tweeting through its US arm Fresh & Easy, The Telegraph reports:

A sample Twitter exchange from earlier this week involves a customer called “songrytr” noting that stock levels had seemed “a little sparse” on recent visits to his local branch, to which Fresh & Easy responds that levels tend to be a bit low at the end of the year due to shipping schedules.

Though perhaps not gripping correspondence, Twitter does help to establish loyalty by giving customers an active way of communicating with the company’s management.