VALLETTA (MALTA) (ITALPRESS/MNA) – Malta has a financial “warchest” of €250 million available to cushion the potential economic impact of escalating tensions in the Gulf, Finance Minister Clyde Caruana told parliament.
Caruana said the government could dedicate an additional €250 million, over and above current subsidy spending, to cover unexpected costs triggered by the war involving Iran without jeopardising Malta’s fiscal targets.
“The country has a headroom, meaning the flexibility we have if prices explode, that is equivalent to €250 million more that could cushion the impact from abroad,” the minister said.
Caruana explained that Malta currently spends about €150 million annually on subsidies. By comparison, the government spent €350 million in 2022 following the outbreak of the Russia–Ukraine War.
Malta has committed to reducing its deficit to within the European Union threshold of 3% this year. Caruana stressed that maintaining this limit is crucial to preserving the financial headroom available in the government’s contingency fund.
His remarks come amid growing concern about the potential effect of rising energy prices on households and the wider economy.
Oil and natural gas prices have climbed after Iran threatened to close the Strait of Hormuz, a strategic passageway through which a significant share of the world’s oil and gas supply is transported. The move has raised fears of supply disruptions and further increases in global energy costs.
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(ITALPRESS).
