Dec 20 (Reuters) - Malta's economy is on course to grow faster, boosted by exports in 2013 and consumer demand in 2014, the central bank said on Friday. It forecast growth of 1.8 percent this year, up from a previous estimate of 1.4 percent, and 2.0 percent next year, compared with 1.8 percent in its April forecast.
Gross domestic product grew just 0.8 percent in 2012. "Real GDP growth for the (2013) year as a whole is expected to be driven by net exports, with imports set to fall faster than exports," the central bank said in its quarter report.
"Overall domestic demand is foreseen to remain weak this year. However, in 2014 it is set to be the main engine of growth as private consumption and investment recover." The report said the country's banking sector was in good shape, rejecting comparisons with Cyprus, whose banking problems forced it to seek a 10 billion euro bailout earlier this year from the European Union and IMF.
"The core domestic banks are highly capitalised, profitable and liquid, and the other categories of the banking sector are similarly robust," the central bank said. At around eight times the size of the Mediterranean country's 6.5 billion euro GDP, Malta's financial sector is one of the largest in the euro zone - second only to Luxembourg's - relative to its economic size. The bank said inflation in the euro zone's smallest member state was seen at 1.0 percent this year before accelerating to 1.4 percent in 2014.
(Reporting by Sakari Suoninen; Editing by Mark Trevelyan) Reuters