Although last weekend saw the first moves towards restarting economic activity in the country, a scientific survey carried out by Dr Vincent Marmara shows that consumer demand will remain slow, with consumers preferring to wait until a vaccine is found before returning to normality. Although the economic scenario does not look so positive, the study concludes that Malta will recover economically before many other countries.

The survey on consumer confidence in the pandemic period, carried out by Dr Vincent Marmara and Sagalytics, offers a basis for the second economic note sounded by the office of former Prime Minister Joseph Muscat.

It results from this analysis that consumer demand showed this had been one of the motors of economic activity in Malta, which activity would not return quickly to the pre-March level when the first case of Covid-19 surfaced, and this even if a vaccine is developed.

The analysis shows that consumer tendency to spend will remain affected for some time because of the negativity brought on by the pandemic, which has had an effect on the pockets of many consumers.

It adds that in these circumstances, it is essential that corrective measures are drawn up to incentivise spending and regain consumer confidence, even in areas of safety in business outlets.

On an economic note, the argument is propounded that if domestic consumption increases, it will serve to reduce the economic downturn and will help Malta to come out of the effects of the economic crisis caused by the pandemic at a faster pace once a vaccine against the coronavirus is on the market.

It warns that the economic and social aspects of the pandemic will have a disproportionate effect on women, with many not remaining active in the labour market if they decide not to send their children to child care centres. This will also impact negatively on the labour market and family income.

The argument is also made in favour of giving a push to greater participation in the labour market, whilst stating that if women become detached from the labour market, it will prove more difficult for them to get back to work. On the basis of a survey among consumers earlier this month, it is estimated domestic consumption will drop by 11% until a vaccine is discovered, and even after it is found, the figure will still be some 2% less than that of last year.

Date: 30th May 2020

Source: https://www.tvm.com.mt/en/news/what-effects-will-the-pandemic-have-on-the-maltese-economy/