Predicting economic recovery by May is ‘pure conjecture’ – economist

Forecasting economic recovery by May in the current pandemic circumstances is “pure conjecture”, economist Lino Briguglio said in comments to The Shift in reaction to statements by Prime Minister Robert Abela.

In a short radio interview on Sunday, Abela once again tried to sell the illusion that the worse of the pandemic crisis was over at a time when economic predictions are being thrown out of the window.

The European Commission recently had to cut its economic forecast for Europe by 2%. Its forecast published in July predicted a 6.1% in economic growth, but later in November the Commission had to revise its predictions to 4.2%.

While most leaders in Europe are bracing for a tough economic year, Malta’s Prime Minister is defying expectations by telling citizens it will be ‘business as usual’ by the spring. His previous predictions on the pandemic hit a brick wall, such as his statement denying a second wave that in fact hit the country when he said “waves are in the sea”.

Veteran economist Lino Briguglio told The Shift that predicting rates of economic growth is difficult in normal times, more so in these particular present circumstances. In fact, as Briguglio pointed out, the majority of the recent economic predictions were mostly completely off the mark and tended to understate the decline in GDP in 2020 with some exaggerating a possible recovery in 2021.

“We cannot be so sure that the ‘COVID defeat’ and ‘business as usual’ will occur in May 2021, as Robert Abela’s statements indicate.  Forecasts for the forthcoming two years at least are pure conjecture,” the economist said.

Briguglio said it might be expected that politicians, especially those in government, present an optimistic scenario, associating this with their ability to manage the situation.

“Yet one should take these statements for what they are — motivated by politics — in order to shed good light on the government. The danger of such statements is that they may encourage persons to lower their guard against possible infections, as if the inoculation is the be-all and end-all in this regard.”

Having persons who can influence a large proportion of the population to present ultra optimistic possibilities is therefore unwise, he added.

In a short link on the Labour Party radio station, the Prime Minister told his followers that he hopes to have a recovering economy by March and a complete “business as usual” by May.

Meanwhile, EU leaders have been quoted saying that the economy will only bounce back to pre-pandemic levels by 2023. EU Economy Commissioner Paolo Gentiloni had told the press late last year that EU forecasts are subject to “an extremely high degree of uncertainty”.

Last July, EU leaders agreed to launch a €1.8 trillion recovery plan to boost the economy within its Member States.

This is not the first time that the prime minister felt the need to create what medical professionals aptly dubbed, “the illusion of fake normality”. It has been proven in the past months that such comments by non-medical professionals only give a false sense of hope and cause the population to not take the dangers of the pandemic seriously.

The same sentiment was expressed by a group of medical professionals, including Superintendent of Public Health Charmaine Gauci, who penned a paper on an internationally renowned medical journal on the COVID-19 situation in Malta.

On Monday the number of daily reported COVID-19 cases peaked to 148, the highest number registered since 26 November. Two people died overnight. Medical professionals are expecting COVID-19 numbers to increase as the country let down its guard during the festive season.