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Employment data ‘tip of the economic iceberg’, GSD says

The GSD cautioned on Tuesday that employment data released by the Gibraltar Government over the past week, while positive at first glance, “do not represent a rosy picture” and are only “the tip of the economic iceberg.”

The data, released in response to questions from the Chronicle, show that more jobs were created this year than were terminated in Gibraltar’s economy.

But while the GSD acknowledges this is positive news, it highlighted too that the rate of growth in employment was sharply down on the two preceding years, pointing to “a massive downturn in economic activity.”

The GSD said the downturn had been “buffered” by the BEAT economic package and its full effects had not been felt yet.

It said the number of jobs in the local market at the end of 2020 would be a crucial figure that would impact on tax revenue and indicate general economic activity, adding that Unite the Union had warned consistently of potential redundancies against the backdrop of Covid-19 and Brexit uncertainty.

The GSD noted too that details of Covid fund spending released recently by the Gibraltar Government pointed to a “massive” loss of revenue streams in tax and import duties for several months this year.

The figures showed that at the end of June, the Government had needed to plug an £81m shortfall in revenue as a result of the economic slowdown.

The Government “starkly” told the last meeting of Parliament that it expected to be running at a loss for some time before Gibraltar returned to a position where it was producing more than it was spending.

“The running loss is currently being funded by borrowing,” said Keith Azopardi, the Leader of the Opposition.

“It is essential that the economy is kick-started properly and that any further assistance granted is targeted much more precisely to assist sectors in need of safe-guarding employment more than others.”

“Continuing to borrow to plug recurrent spending is also unsustainable in the long-term.”

“It is made worse by the fact that the Government had managed Gibraltar’s affairs in a way that we entered the Covid crisis with gross borrowing in the region of £1.3 billion.”

“The Government has to deliver a consistent message. It cannot seriously be talking these employment figures up and saying it will be conducting ambitious spending commitments while at the same time it is borrowing money to plug a hole in its expenditure and telling people to adopt a culture of economic responsibility that it does not follow itself.”