The Malta Chamber of Commerce and Enterprise refers to various recent public statements on inflation and rising prices, especially food items, as well as calls for the re-introduction of price stability agreements and tax cuts.

The Chamber reiterates its firm belief in free market forces. The local market is mature and competitive. Such is the level of competition that if a company adopts a pricing policy which is not in tune with the realities of the market, it would be immediately out-priced from the market. The Chamber believes that the free market is the best form of price control for the benefit of the consumer and the authorities.

Surely no one can ignore the international situation which is the major contributor in rising inflationary pressures on the local economy.

The Chamber would also like to refer to the European Commission's quarterly report of the Euro Area, which was quoted in some media reports regarding the situation of food prices in Malta. In page 27 this report acknowledges that "Malta, for instance, imports almost all of its food supplies. Consequently, fluctuations in global food prices have a significant impact on inflation developments."

The Chamber insists that requests for the authorities to seek new price stability agreements so that prices would not continue to rise: are to say the least simplistic in their outlook and futile in their aim. The price stability agreements which came to an end in March were voluntarily entered into by a number of Maltese companies with the sole aim of ensuring a smooth currency transition. This measure was never intended to control inflation.

In so far as other measures being mooted, such as tax cuts - although these could help in the short-term, the Chamber insists that sustainable export-led growth is crucial for the country's long-term economic prosperity: and this can only be achieved through increased competitiveness and productivity.