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An estimate of the possible impact of lower electricity and water tariffs on the Maltese economy

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  • Grech, Aaron George

Abstract

This paper presents estimates of the possible impact on the Maltese economy of the reduction in electricity and water tariffs to residential customers that took place on 31 March 2014 and the subsequent lowering of tariffs to commercial customers, which is expected to take place in March 2015. These estimates are calculated using the structural macro-econometric model described in Grech et al (2013). Assuming a full and immediate pass-through of these measures, this paper suggests that Malta’s real GDP could be boosted by 0.65 percentage points by 2020, with the bulk of the impact being felt during 2015 and 2016. The measures should also lead to lower consumer price inflation and contribute towards an improvement in the international competitiveness of the Maltese economy.

Suggested Citation

  • Grech, Aaron George, 2014. "An estimate of the possible impact of lower electricity and water tariffs on the Maltese economy," MPRA Paper 57130, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:57130
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    File URL: https://mpra.ub.uni-muenchen.de/57130/1/MPRA_paper_57130.pdf
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    References listed on IDEAS

    as
    1. Grech, Aaron George & Grech, Owen & Micallef, Brian & Rapa, Noel & Gatt, William, 2013. "A Structural Macro-Econometric Model of the Maltese Economy," MPRA Paper 46128, University Library of Munich, Germany.
    2. repec:pra:mprapa:46125 is not listed on IDEAS
    3. Grech, Aaron George & Micallef, Brian, 2014. "Assessing the supply of the Maltese economy using a production function approach," MPRA Paper 53882, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Noel Rapa, "undated". "The Macroeconomic Effects of Efficiency Gains in Electricity Production in Malta," CBM Policy Papers PP/05/2017, Central Bank of Malta.
    2. Brian Micallef & Reuben Ellul, 2020. "How Do Estimates of Inflation Persistence in Malta Compare with Other EU Countries?," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(7), pages 1-31, July.

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    More about this item

    Keywords

    Macro-econometric modelling; Malta; utility tariffs.;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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