1. society
2. work
3. unemployment

MALTA NIPPREMJAW
IL-BŻULIJA
ECONOMIC SURVEY
2014
Economic Survey
November 2014
Economic Policy Department
Ministry for Finance
17th November, 2014
CIP Data
Economic Survey November 2014 / Economic Policy Department. - Valletta :
Ministry for Finance, 2014. 179 p. 24 cm.
ISBN: 978-99932-94-92-4
The following symbols have been used throughout this document:
...
to indicate that data are not available;
0
to indicate that the figure is zero;
-
to indicate that data are not applicable or cannot be determined;
—
to indicate that the figure is negligible;
National Accounts estimates and other statistics which appear in this Economic Survey
are provisional and subject to revision. Figures may not add up due to rounding.
This document is based on statistical information available up to 31st October 2014.
Printed at the Government Press
Price: €5.00
Contents
page
1. Executive Summary ................................................................................................................3
2. Economic Growth ...................................................................................................................9
The International Context ....................................................................................................9
The Maltese Economy .......................................................................................................10
Private Final Consumption Expenditure .....................................................................17
General Government Final Consumption Expenditure ...............................................17
Gross Capital Formation .............................................................................................18
Foreign Demand and Supply.......................................................................................19
Sectoral Growth in Gross Value Added .............................................................................20
Gross Domestic Product from the Income Approach ........................................................23
Gross National Income ......................................................................................................26
3. Employment ..........................................................................................................................31
Labour Market Developments ...........................................................................................31
Recent Employment Trends ........................................................................................31
Developments in the Unemployment Rate .................................................................34
General Labour Market Developments in the Euro Area and the EU ........................37
Sectoral Employment ........................................................................................................40
Private Sector Employment................................................................................................43
Public Sector Employment.................................................................................................48
A Profile of Registered Unemployed under Part 1 ............................................................51
Part-time Activity ..............................................................................................................53
4. Productive Activities .............................................................................................................59
Industrial Turnover............................................................................................................59
Manufacturing Performance .............................................................................................60
Computer, Electronic and Optical Products ................................................................60
Food Products .............................................................................................................60
Basic Pharmaceutical Products ...................................................................................61
Other Manufacturing ...................................................................................................61
Printing and Reproduction of Recorded Media ..........................................................61
Motor Vehicles, Trailers and Semi-Trailers ................................................................62
Economic Survey November 2014
i
Other Non-Metallic Products.......................................................................................62
Electrical Equipment....................................................................................................62
Agriculture and Fisheries ..................................................................................................70
Agriculture ..................................................................................................................70
Fisheries ......................................................................................................................72
5. Services Activities.................................................................................................................79
Tourism ..............................................................................................................................79
Monthly Distribution...................................................................................................80
Tourist Nationality ......................................................................................................82
Cruise Passengers ........................................................................................................84
Accommodation ..........................................................................................................84
Employment ................................................................................................................86
Tourism Earnings ........................................................................................................87
Regulatory Activity.............................................................................................................88
Malta Financial Services Authority ............................................................................88
Lotteries and Gaming Authority..................................................................................90
Development and Investment Promotion ...................................................................91
6. Prices and Incomes ...............................................................................................................95
Inflation .............................................................................................................................95
International Comparison ...........................................................................................95
Retail Price Index and COLA............................................................................................98
Sectoral Wages ................................................................................................................101
7. Foreign Trade and Payments............................................................................................... 111
Exports ............................................................................................................................ 111
Geographical Distribution - Exports .........................................................................112
Imports ............................................................................................................................114
Geographical Distribution - Imports .........................................................................115
Trade Balance..................................................................................................................117
Geographical Distribution - Trade Balance ..............................................................119
Balance of Payments .......................................................................................................120
The Current Account .......................................................................................................120
The Goods and Services Account .............................................................................121
Primary Income..........................................................................................................124
Secondary Income......................................................................................................126
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Economic Survey November 2014
The Capital and Financial Account .................................................................................126
8. Financial Developments......................................................................................................131
Public Finance .................................................................................................................132
Revenue .....................................................................................................................133
Expenditure ...............................................................................................................136
Recurrent Expenditure ..............................................................................................137
Capital Expenditure...................................................................................................139
International Comparison ..........................................................................................140
Monetary Developments .................................................................................................148
Contribution of Resident MFIs to Euro Area Monetary Aggregates ........................148
Contribution of Resident MFIs to Counterparts to Euro Area Monetary
Aggregates................................................................................................150
The Money Market....................................................................................................152
Deposit and Lending Rates .......................................................................................155
The Capital Market ...................................................................................................156
Exchange Rate Developments .........................................................................................159
Boxes
2.1 ESA 2010..........................................................................................................................12
3.1 Developments in Private Sector Employment in Manufacturing......................................44
3.2 Employment in Gozo........................................................................................................50
4.1 The Industrial Production Index ......................................................................................63
4.2 Economic Accounts for Agriculture 2013 ........................................................................73
8.1 General Government Budgetary Developments .............................................................146
Tables
2.1 GDP by Category of Expenditure .....................................................................................10
2.2 GDP by Category of Expenditure - Percentage Changes .................................................11
2.3 Gross Fixed Capital Formation .........................................................................................18
2.4 Sectoral Gross Value Added..............................................................................................21
2.5 Average Weekly Wage per Employee ...............................................................................25
2.6 Gross Domestic Product from the Income Side ................................................................26
2.7 Gross National Income .....................................................................................................27
3.1 Labour Market Performance (Persons aged 15 and over) ................................................32
3.2 Distribution of Employed Persons by Type of Employment in Main Occupation ...........33
3.3 Employment Rates by Age................................................................................................34
Economic Survey November 2014
iii
3.4 Unemployment Rates by Age ...........................................................................................36
3.5 Employment Rates across EU ...........................................................................................38
3.6 Unemployment Rates across EU ......................................................................................39
3.7
Labour Market Indicators ................................................................................................41
3.8
Private Sector Employment .............................................................................................46
3.9
Contribution to Growth in Private Sector Employment - Direct Production...................46
3.10 Employment in Market Services ......................................................................................47
3.11 Contribution to Growth in Private Sector Employment - Market Services .....................47
3.12 Public Sector Employment ..............................................................................................48
3.13 Registered Unemployed - by duration of registration......................................................52
3.14 Registered Unemployed - by age distribution .................................................................52
3.15 Registered Unemployed Classified by Occupation..........................................................53
3.16 Part-Time Employment ....................................................................................................54
4.1 Indicators of Industrial Activity ........................................................................................64
4.2 Short-term Activity Indicators for Manufacturing ............................................................65
4.3 Agricultural Indicators ....................................................................................................71
4.4
Imports of Major Agricultural Commodities ...................................................................72
5.1
Main Tourism Indicators ..................................................................................................79
5.2
Monthly Inbound Tourists ................................................................................................81
5.3
Quarterly Distribution of Inbound Tourists .....................................................................82
5.4
Inbound Tourists by Nationality ......................................................................................83
5.5
Main Types of Tourist Accommodation ...........................................................................85
5.6
Monthly Accommodation Occupancy Rates ...................................................................86
5.7
Expenditure from Inbound Tourism .................................................................................87
6.1
Harmonised Index of Consumer Prices - September 2014 ..............................................96
6.2
Harmonised Index of Consumer Prices - Annual rate of change (y-o-y) ........................98
6.3
Index by Commodity Group - Average for 12 months ....................................................99
6.4
Retail Price Index - 12-Month Moving Average Inflation Rate .....................................100
6.5 Average Weekly Wages - September 2013.....................................................................103
6.6 Average Weekly Wages - September 2014.....................................................................104
6.7
Changes in Average Weekly Wages - September 2014 - September 2013 ....................105
6.8
Proportion of Sampled Employees in Wage Ranges......................................................107
7.1
Commodity Breakdown of Exports ............................................................................... 111
7.2 Total Exports by Main Geographical Areas ...................................................................113
7.3
Imports by Broad Economic Category ..........................................................................115
7.4 Total Imports by Main Geographical Areas ...................................................................116
7.5
Foreign Trade..... ............................................................................................................118
7.6 Trade Balances with Various Countries .........................................................................119
7.7
Balance of Payments - Goods, Services and Income Account (Net) .............................122
7.8
Balance of Payments - Current Account ........................................................................125
7.9
Current, Capital and Financial Flows - per cent of GDP ...............................................127
8.1 Government Revenue and Expenditure - January - September ......................................132
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Economic Survey November 2014
8.2 General Government Net Lending (+) or Borrowing (-) ................................................141
8.3 General Government Gross Debt ....................................................................................142
8.4 Contribution of Resident MFIs to Euro Area Monetary Aggregates ..............................149
8.5 Resident Deposits ...........................................................................................................150
8.6 Contribution of Resident MFIs to Counterparts to Euro Area Monetary
Aggregates..................................................................................................................151
8.7 Credit to Other Residents - Loans by Economic Activity...............................................152
8.8 Government Stocks - Activity on the Secondary Market ...............................................157
8.9 Selected Indicators of the Capital Market .......................................................................158
Appendix Tables
8.1 Government Revenue - January - September .................................................................162
8.2 Government Recurrent Expenditure - January - September ...........................................163
8.3 Government Capital Expenditure - January - September ...............................................165
Charts
2.1 Quarterly Gross Domestic Product .....................................................................................9
2.2 Contribution to Growth in Gross Value Added .................................................................21
2.3 Compensation of Employees ............................................................................................22
2.4 Average Weekly Compensation per Employee - (excludes employers' N.I.
contributions).................................................................................................................23
3.1 Harmonised Deseasonalised Unemployment Rate ...........................................................36
3.2 Employment Growth Rate - Apr-June 2013 - Apr-June 2014...........................................37
3.3 Change in Unemployment Rate - Apr-June 2013 - Apr-June 2014 ..................................38
5.1 Inbound Tourists ...............................................................................................................80
5.2 Tourist Market Shares - January - December....................................................................83
5.3 Expenditure from Inbound Tourism ..................................................................................88
6.1 Harmonised Index of Consumer Prices ............................................................................97
7.1 Commodity Breakdown of Exports - January - August 2014 .........................................112
7.2 Foreign Trade ..................................................................................................................118
7.3 Current Account - As a per cent of GDP.........................................................................121
7.4 Goods and Services Account ..........................................................................................124
8.1 Consolidated Fund Balance ............................................................................................133
8.2 Government Total Revenue ..........................................................................................134
8.3 Government Total Expenditure .......................................................................................136
8.4 Capital Expenditure ........................................................................................................139
8.5 Local Interest Rates and Margins....................................................................................156
8.6 Euro Exchange Rate Movements ....................................................................................159
Economic Survey November 2014
v
Statistical Annex
I.
Population ......................................................................................................................169
II.
Social Indicators ............................................................................................................170
III.
Factor Incomes in Gross National Income....................................................................171
IV.
Gross National Income and Expenditure ......................................................................172
V.
Labour...........................................................................................................................173
VI.
Tourism .........................................................................................................................174
VII.
Foreign Trade ...............................................................................................................175
VIII. Balance of Payments ....................................................................................................176
IX.
Government Revenue and Expenditure ........................................................................177
Xa.
Monetary Aggregates and Their Counterparts ..............................................................178
Xb.
Contribution of Resident MFIs to Euro Area Monetary Aggregates and
Counterparts ...............................................................................................................179
vi
Economic Survey November 2014
1. Executive Summary
1. Executive Summary
The global economy remains characterised by an elevated level of uncertainty.
The moderate recovery that started during 2013 failed to gain momentum as
weaker-than-expected activity in the European Union (EU) and other major
economies during the first half of 2014 damped growth prospects.
Indeed, in the first half of 2014, economic growth averaged 1.4 per cent in
the EU and 0.8 per cent in the Euro Area with an uneven recovery among the
various Member States. Over the course of next year, growth in the EU and
the Euro Area is expected to gradually rise. However, growth prospects remain
susceptible to many downside risks, particularly the increasing geo-political
tensions and the lingering risks of more protracted low growth and low inflation.
Labour market conditions in the Euro Area remain subdued with job creation
remaining moderate and unemployment rates falling only slightly over recent
months. In fact, the unemployment rate declined by 0.5 percentage points to
11.4 per cent in the second quarter of 2014. Meanwhile, the Euro Area-wide
inflation rate stood at 0.8 per cent by the end of the second quarter, substantially
below the European Central Bank’s (ECB) price stability objective.
In contrast to developments in the EU, the Maltese economy continued to
register encouraging results. During the first half of 2014, the Maltese economy
expanded by 3.2 per cent in real terms, outperforming growth in the EU. In
nominal terms, this increase was reflected in a growth rate of 4.5 per cent,
with Gross Domestic Product (GDP) standing at €3,791.0 million up from
the €3,626.4 million recorded in the same comparable period last year. This
performance was underpinned by buoyant domestic demand. Net exports also
contributed positively as imports dropped more than exports in the period
under review.
Growth in Gross Value Added was attributed to a positive performance in
the majority of the sectors of the economy particularly in the service sectors.
Manufacturing activity was uneven with an overall decline being registered.
Growth in gross value added declined in agriculture and fisheries whilst the
construction industry registered a positive turnaround.
Figures for the first half of 2014 indicate that the increases in the activity rate
were reflected into higher employment and lower unemployment rates. The
Labour Force Survey reports an increase of 1.2 per cent in employment when the
second quarter of 2014 is compared to the same quarter in 2013. The Eurostat
Economic Survey November 2014
3
harmonised and seasonally adjusted unemployment rate stood at 5.8 per cent, 0.8
percentage points lower than that recorded in the second quarter of 2013. Recent
labour market developments indicate that employment increased across most
segments of the Maltese labour market, with a significant increase registered
in private sector employment, both the services and the direct production
categories. The higher level of employment in direct production was mainly
a reflection of developments in the construction and the manufacturing sector
while employment increases in the services sector were largely attributable to
professional, technical and administrative activities, wholesale and retail, and
information and communication. It is also notable that the share of females in
total employment continued to increase, meaning that the underlying trend of
a rising female employment rate was sustained. This also reflects Government
efforts to increase the participation rate in this segment of the labour market.
The performance of industrial turnover weakened during the first seven months
of 2014, mainly on account of a deterioration in the export market which was not
compensated by the rise in domestic sales. Employment in industry remained
broadly at the level recorded during the same period last year, while the number
of hours worked decreased. Nevertheless, in the same period, remuneration for
industrial employees increased. The average weekly wage as derived from a
study concerning collective agreements stood at €294.78 up by €4.50 or 1.6
per cent over the same period last year, with the strongest increase registered
in the Community & Business Sector and in the Transport Sector.
The performance of the tourism industry continued to register a positive outcome
in the first eight months of 2014. Inbound tourists increased by 8.4 per cent
over the previous corresponding period, reaching the 1.16 million mark. The
increase was broad-based with positive results recorded in almost all salient
tourism indicators, including, in the nights spent by inbound tourists, which
increased by 4.9 per cent and expenditure from inbound tourism which increased
by 6.5 per cent. Moreover, average full-time employment in the accommodation
and food service activities recorded a marginal increase of 0.7 per cent during
the year to May 2014. With regards to the cruise passenger industry, between
January-September 2014, arrivals that exclude the embarkations and the Maltese
cruise passenger arrivals, increased by 2.7 per cent over the corresponding
period in 2013.
In September 2014, the domestic annual inflation rate was recorded at 0.6 per
cent. During the last twelve months, inflation remained broadly constant, with
an upward trend registered up to February 2014 followed by a generally lower
rate of inflation thereafter. Malta’s inflation rate in September 2014 was slightly
higher than that recorded in the Euro Area, which stood at 0.3 per cent.
4
Economic Survey November 2014
The General Government deficit in Malta decreased to 2.7 per cent of GDP
in 2013. During the first nine months of 2014, both revenue and expenditure
components increased, with the latter registering a slightly higher increase. This
resulted in a widening of the shortfall between Government recurrent revenue
and expenditure in the Consolidated Fund of €12.5 million when compared to
the same period in the previous year, mainly reflecting excise payments owed
by Enemalta to Government.
The current account surplus stood at 3.8 per cent of GDP during the first half of
2014, in contrast to the deficit of 0.6 per cent of GDP recorded during the same
period in 2013. This development was mainly underpinned by the increase in
the surplus on the services account together with a reduction in primary income
net payments which more than offset the increase in the goods account deficit
and reduction in secondary income net receipts. Meanwhile, net lending in the
financial account amounted to €301.8 billion, as a result of the decrease in net
assets of direct investment and other investment coupled with the increase in net
assets within portfolio investments and financial derivatives. These movements
were also complemented by the increase in reserve assets.
Short-term deposits, in particular overnight deposits, exhibited a significant
increase during the Survey period reflecting depositors’ preferences in a
relatively low interest rate environment. In addition, deposits with agreed
maturity of up to three months and up to two years also contributed positively,
albeit very mildly. Moreover, interest rate spreads declined very marginally
remaining broadly stable. The dynamics of such a stable spread level between
local lending and deposits rates reflect an overall marginal decrease in deposit
rates which on the whole was higher than the minimal general decline registered
in lending rates.
Economic Survey November 2014
5
2. Economic Growth
2. Economic Growth
The International Context
Seven years after the onset of the Great Recession, the world economy is still
struggling to get back to the pre-crisis levels of performance. According to
the IMF’s most recent Economic Outlook, a fragile and uneven recovery has
followed; whilst growth in the US and the UK has strengthened, growth in
the Euro Area and Japan remains more anaemic. In emerging markets growth
is expected to be subdued in Russia and Brazil, slow in China but stronger
in India and emerging Asia. Data for the first half of 2014 remains positive
but disappointing compared to earlier growth projections. Inflation remains
subdued in most advanced economies, but particularly in the Euro Area and
Japan. Downside risks have also strengthened, also reflecting increased geopolitical tensions in Ukraine and the Middle East. Whilst financial markets
have remained largely up-beat and financial risk has diminished, investment
activity particularly in advanced economies remained weak. Growth in global
trade volumes in the first half of 2014 has also underperformed relative to global
activity growth but is expected to recover albeit at a more modest pace when
compared to previous recoveries.
Chart 2.1
Quarterly Gross Domestic Product
Y-O-Y Percentage Change
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
Nominal GDP
Economic Survey November 2014
2012Q3
2013Q1
2013Q3
2014Q1
Real GDP
9
The Maltese Economy1
Amidst the fragile economic performance of most countries in the Euro Area, the
Maltese economy continued to grow by an average rate of 4.5 per cent in nominal
terms and 3.2 per cent in real terms in the first half of 2014 when compared
to the same period in the previous year. Year-on-year economic growth rates
are presented in Chart 2.1. From the expenditure side, growth was primarily
attributed to the domestic side of the economy, which contributed positively by
4.3 percentage points. This was mainly driven by gross fixed capital formation
which increased by 9.4 per cent in real terms as a number of large scale projects,
namely the Malta-Sicily interconnector and other projects set out to reconstruct
GDP by Category of Expenditure
Table 2.1
€ million
2010
2011
2012
2013
2013
2014
Jan-Jun
Jan-Jun
At Current Market Prices
Private Final Consumption Expenditure(1)
3,814.9
4,003.5
4,120.2
4,237.1
2,061.7
2,110.5
Consumption Expenditure
1,286.4
1,340.1
1,443.7
1,487.6
734.5
796.8
Gross Fixed Capital Formation
1,411.6
1,226.0
1,259.7
1,314.1
647.3
712.7
164.5
191.4
(29.2)
28.8
68.0
(15.0)
General Government Final
Changes in Inventories
Acquisitions less Disposals of Valuables
(17.9)
(24.1)
0.7
12.5
2.7
4.2
Exports of Goods and Services
10,114.1
10,933.8
11,772.9
11,614.3
5,618.9
5,596.1
Total Final Expenditure
16,773.7
17,670.5
18,568.0
18,694.4
9,133.2
9,205.2
Less Imports of Goods and Services
10,174.2
10,776.2
11,389.1
11,184.3
5,506.8
5,414.3
6,599.5
6,894.4
7,178.9
7,510.1
3,626.4
3,791.0
3,814.9
3,908.9
3,927.6
3,992.6
1,941.8
1,981.3
Consumption Expenditure
1,286.4
1,323.4
1,405.8
1,413.4
699.7
747.2
Gross Fixed Capital Formation
1,411.6
1,170.5
1,161.6
1,187.3
585.4
640.2
Gross Domestic Product
At Chain Linked (2010) Volumes
Private Final Consumption Expenditure(1)
General Government Final
Changes in Inventories
Acquisitions less Disposals of Valuables
Exports of Goods and Services
10,114.1
10,298.6
10,952.2
10,776.4
5,150.0
5,079.6
Total Final Expenditure
16,773.7
16,872.5
17,434.9
17,431.9
8,450.3
8,451.8
Less Imports of Goods and Services
10,174.2
10,125.1
10,555.1
10,379.4
5,149.6
5,045.4
6,599.5
6,747.5
6,879.9
7,052.5
3,300.6
3,406.4
Gross Domestic Product
(1)Includes NPISH final consumption expenditure
Source: National Statistics Office
10
Economic Survey November 2014
roads and infrastructure, started to materialise. Public and private consumption
also contributed positively towards economic growth as they increased by 6.8
per cent and 2.0 per cent, respectively. Growth in private consumption was in
turn backed by positive employment developments and growing disposable
income, lower interest rates, lower inflation and less fiscal drag. At the same
time, improved consumer confidence and economic sentiment, as confirmed by
GDP by Category of Expenditure
Percentage Changes
Table 2.2
2011
2012
2013
2013
2014
Jan-Jun Jan-Jun
At Current Market Prices
Private Final Consumption Expenditure(1)
4.9
2.9
2.8
2.1
2.4
4.2
7.7
3.0
3.7
8.5
-13.2
2.8
4.3
2.6
10.1
-0.4
General Government Final
Consumption Expenditure
Gross Fixed Capital Formation
Changes in Inventories
Acquisitions less Disposals of Valuables
Exports of Goods and Services
8.1
7.7
-1.3
-2.3
Total Final Expenditure
5.3
5.1
0.7
-0.0
0.8
Less Imports of Goods and Services
5.9
5.7
-1.8
-2.8
-1.7
Gross Domestic Product
4.5
4.1
4.6
4.4
4.5
2.5
0.5
1.7
0.6
2.0
2.9
6.2
0.5
1.5
6.8
-17.1
-0.8
2.2
1.1
9.4
-1.4
At Chain Linked (2010) Volumes
Private Final Consumption Expenditure(1)
General Government Final
Consumption Expenditure
Gross Fixed Capital Formation
Changes in Inventories
Acquisitions less Disposals of Valuables
Exports of Goods and Services
1.8
6.3
-1.6
-3.1
Total Final Expenditure
0.6
3.3
-0.0
-1.0
0.0
-0.5
4.2
-1.7
-3.2
-2.0
2.2
2.0
2.5
2.6
3.2
Less Imports of Goods and Services
Gross Domestic Product
(1)
Includes NPISH final consumption expenditure
Source: National Statistics Office
Economic Survey November 2014
11
Box 2.1
ESA 2010
As from September 2014, the new framework for national accounts statistics,
the European System of Accounts (ESA) 2010, came into force. This is the
newest internationally compatible EU accounting framework for a systematic
and detailed description of an economy. The ESA 2010 differs in scope as well
as in concept from its predecessor ESA 95, reflecting developments in measuring
modern economies, advances in methodological research and the needs of users.
The main methodological changes with an impact on GDP are:
•
•
Research and Development (R&D) spending is now considered as
investment rather than current expenditure. This increased the level of EU
GDP in 2010 by 1.9 per cent.
Expenditure on weapon systems is now considered as investment, rather
than intermediate expenditure. This increased the level of EU GDP in 2010
by 0.2 per cent.
For most Member States, including Malta, the implementation of the ESA 2010
guidelines is accompanied by the incorporation of statistical improvements in
data. The main changes other than those related to ESA 2010 are:
•
•
Benchmark revisions, in which national methodologies and data sources are
reviewed and updated. In some cases, benchmark revisions may generate a
more significant revision to GDP than the changeover to ESA 2010.
The harmonisation of measurement of certain illegal activities, notably
prostitution and the production and trafficking of drugs. While these were
already included in the official definition of GDP under the old standard,
implementation varied from country to country. A common methodology
for recording these activities is now being applied.
While these two changes produced shifts in the GDP levels of most Member
States, growth rates were almost unaffected. Indeed, the average annual
difference between the level of GDP in current prices under ESA 2010 and
ESA 95 over the period 1997-2013 amounted to +3.4 per cent in both the Euro
Area (EA18) and the EU28. Meanwhile, the change in the annual GDP growth
rates over the years 1997-2013 was around +/-0.1 percentage points for both the
Euro Area and the EU28. Table 1 gives a preliminary assessment of the impact
of methodological changes and statistical improvements on the level of GDP
in 2010 (per cent of GDP) for the EU28.
12
Economic Survey November 2014
Impact of methodoloical changes and statistical improvements on
the level of GDP in 2010
(% of GDP)
Table 1
GDP
Statistical
Improvements
and Benchmark
Revisions
ESA 2010
Total
Total
of which R&D
Total
EA18
EU28
Belgium
Bulgaria
Czech Republic
Denmark
3.5
3.7
2.8
2.0
4.3
2.5
2.2
2.3
2.5
0.4
3.1
2.7
1.9
1.9
2.4
0.3
1.2
2.6
1.3
1.4
0.3
1.6
1.2
-0.2
Germany
Estonia
Ireland
Greece
3.3
1.2
4.2
1.8
2.7
1.4
3.6
1.3
2.3
0.9
3.5
0.6
0.6
-0.2
0.6
0.6
Spain
France
Croatia
Italy
3.3
3.2
1.3
3.4
1.6
2.4
0.5
1.5
1.2
2.2
0.4
1.3
1.7
0.8
0.8
1.9
Cyprus
Latvia
Lithuania
Luxembourg
9.5
-0.1
1.1
0.2
1.1
1.1
0.8
1.6
0.2
0.5
0.4
0.5
8.4
-1.2
0.2
-1.4
Hungary
Malta
Netherlands
Austria
1.6
2.2
7.6
3.2
1.6
0.5
1.7
3.7
1.2
0.5
1.8
2.3
0.0
1.7
5.9
-0.6
Poland
Portugal
Romania
Slovenia
1.5
4.1
1.9
2.1
1.2
2.1
0.6
2.0
0.5
1.3
0.5
1.9
0.2
2.0
1.3
0.1
Slovakia
Finland
Sweden
United Kindgom
1.9
4.7
5.5
4.9
1.8
4.2
4.4
2.3
0.6
4.0
4.0
1.6
0.1
0.5
1.1
2.6
Source: Eurostat
Economic Survey November 2014
13
Implementation in Malta
In the case of Malta, the adoption of the new system meant that the entire time
series from 1995 onwards was revised. The main changes in the GDP and GNI
levels between 2010 and 2013 for Malta are presented in Table 2.
GDP at current prices and impact of revisions: 2010-2013
Table 2
ESA 2010 Revision on GDP
Benchmark Revision on GDP
Total impact of all revisions on GDP
Total impact of all revisions on GNI
per cent
2010
2011
2012
2013
0.5
1.7
2.2
4.8
0.4
2.6
3.0
4.8
0.4
3.4
3.8
6.0
0.5
2.9
3.4
5.3
Source: National Statistics Office
Effects of ESA 2010
During this period the introduction of ESA 2010 increased the GDP by
an average of 0.4 percentage points and the GNI by an average of 0.6
percentage points. The main reason for this increase is the capitalisation of
R&D expenditure as Gross Fixed Capital Formation (GFCF). In 2013, this
reclassification was responsible for 0.5 percentage points of the increase in
the GDP level.
Effects of Statistical Improvements and Benchmark Revisions
Methodological improvements increased the GDP by an average of 2.7
percentage points and GNI by an average of 4.6 percentage points. The main
improvements mainly relate to the financial sector. New estimates are now
inclusive of special purpose entities and incorporate the results of a statistical
project on the insurance sub-sector, where the compilation method was
reviewed. Other enhancements include the identification of new data sources
for holding companies and trusts. Reclassifications in the banking sector were
also taken on board for the whole time series. The benchmark revision also
incorporates updates which resulted from the finalisation of supply and use
tables. Some of the most important improvements relate to the methodological
14
Economic Survey November 2014
Impact of Statistical Improvements and Benchmark
Revisions on GDP
per cent
Table 3
2010
2011
2012
2013
GDP
1.7
2.6
3.4
2.9
GNI
4.2
4.2
5.3
4.6
GDP/GNI
GDP/GNI
0.3
1.8
0.3
2.0
0.3
1.9
0.3
GDP
0.3
0.3
0.4
0.4
GNI
1.8
1.6
1.8
1.6
Benchmark
of which:
SBS 2011/Other
Illegal Activities
SPEs
Source: National Statistics Office
Revisions national accounts: Results for 2010
Table 4
Indicator
Revision *
New level
Origin of main revision
GDP
2.2%
€6,599.5 million
GNI
4.8%
€6,321.3 million
GDP per capita
2.2%
€15,922.0 million
ESA 2010, SPEs, Insurance,
Alignment with balance of payment
statistics, Regular revisions, New
sources, Illegal activities
Total exports
72.9%
€10,114.1 million
Integration of SPEs
Exports ratio (exports as a % of GDP)
62.7%
153.3%
Integration of SPEs
Total imports
72.9%
€10,174.2 million
Integration of SPEs
Imports ratio (imports as a % of GDP)
63.0%
154.2%
Integration of SPEs
GFCF
9.8%
€1,411.6 million
Expenditure of R&D and Transfer
costs for Dwellings
GFCF as a % of GDP
1.5%
21.4%
Expenditure of R&D and Transfer
costs for Dwellings
Private household consumption expenditure
-0.8%
€3,717.9 million
Expenditure on food, culture,
accomodation and financial services
Government consumption expenditure
-0.4%
€1,286.4 million
R&D expenditure is now recorded as
capital formation
Compensation of employees
0.6%
€2,845.3 million
New data sources
Property income received from the rest of the world
309.0%
€6,571.1 million
Integration of SPEs
Property income paid to the rest of the world
237.2%
€6,853.2 million
Integration of SPEs
* Compared to the GDP and its sub-components in ESA1995 as published in news release 159/2014
Source: National Statistics Office
Economic Survey November 2014
15
alignment in the compilation of the national accounts and balance of payments
statistics. A number of pending methodological issues where Malta was not fully
aligned with Eurostat methods were also dealt with. The revisions presented
from 2011 onwards include other routine updates based on the latest Structural
Business Statistics (SBS) survey and the availability of financial statements.
The effects of the main benchmarks revisions are summarised in Table 3, whilst
Table 4 presents more the revision (together with the source of revision) in some
of the main variables of national accounts for benchmark year 2010.
Another major methodological improvement relates to changes in the
compilation of national accounts data in real terms. To meet EU requirements,
the ESA 2010 volume series of quarterly national accounts shall be calculated
at chain-linked prices rather than at constant base-year prices as was the case
under ESA 1995. In addition, the reference year for the GDP calculated with the
chain-linking method was moved from 2000 to 2010. This new method provides
a better description of economic changes, yet users should be cautioned that as
a result of this change, levels of sub-components of GDP in real terms do not
add up to the level shown by aggregate categories. Non-additivity arises for
purely mathematical reasons and does not reflect low quality of calculations.
More information on ESA 2010, including legal documents, manuals and
guidelines are available on the dedicated sections of the National Statistics
Office (NSO) and Eurostat websites.
the Consumers Surveys published by the European Commission, also supported
the strong domestic demand registered in the first half of the year.
In the first two quarters of 2014, the external side of the economy also contributed
positively to economic growth. Specifically, net trade contributed 1.0 percentage
point to economic growth, reflecting a decline in real imports which exceeded
the decline in exports. On the other hand, stock building, acted as a downward
drag on economic growth, contributing negatively by 2.1 percentage points.
As a result of these developments, growth reached 3.2 per cent in real terms
in the first half of the year. Data related to these developments is presented in
Table 2.1 and Table 2.2 which present GDP data by category of expenditure
and the respective relevant percentage changes, respectively.
16
Economic Survey November 2014
Private Final Consumption Expenditure
The private final consumption expenditure category (defined as household
final consumption expenditure and non-profit institutions serving households
(NPISH) final consumption expenditure) continued to grow by an average rate
of 2.4 per cent in nominal terms and 2.0 per cent in real terms in the first half of
2014. These growth rates point to an improvement in private final consumption
which grew by 2.1 per cent in nominal terms and 0.6 per cent in real terms
during the same period of 2013. These positive developments were largely
backed by strong employment growth, improved confidence and increases
in disposable income which were partly supported by the reduction in utility
tariffs as of April 2014.
At the same time however, the proportion of private consumption in real GDP
declined slightly over the course of 2014 compared to the same comparable
periods in 2012 and 2013. While in the first half of 2012 this proportion stood
at 60.0 per cent, the ratio declined by 1.2 percentage points to 58.8 per cent
for the same period in 2013 and by 0.6 percentage points to 58.2 per cent for
the same period in 2014.
The increase in aggregate nominal private consumption in the first half of 2014
was broadly distributed among all the different expenditure categories, with
the exception of the recreation and culture subcategory and the housing, water,
electricity, gas and other fuels subcategory which declined by 4.0 per cent and
1.4 per cent, respectively. On the other hand, increases were recorded among all
the other subcategories with notable performance in the transport subcategory
(8.8 per cent), the hotel and restaurants subcategory (7.7 per cent), the education
subcategory (7.0 per cent) and the furnishings, housing equipment and routine
household maintenance subcategory (6.0 per cent).
General Government Final Consumption Expenditure
General Government expenditure registered an increase of 8.5 per cent in
nominal terms during the Survey period. This represents a 4.8 percentage point
increase over the same period of last year. In real terms, general Government
expenditure increased by 6.8 per cent compared to an increase of 1.5 per cent
recorded in the first half of 2013.
General Government final consumption expenditure as a ratio of real GDP
increased from 21.2 per cent in the first half of 2013 to 21.9 per cent in the
corresponding period of 2014, an increase of 0.7 percentage points. It is pertinent
to note that general Government final consumption expenditure excludes transfer
Economic Survey November 2014
17
payments, such as Social Security benefits, subsidies and grants since such
items of expenditure do not reflect the production of goods and services but
constitute a redistribution of funds between different sectors of the economy.
Gross Capital Formation
Gross Capital Formation comprises gross fixed capital formation, changes in
inventories and acquisitions less disposals of valuables. The main item within
this component, gross fixed capital formation (GFCF), registered a nominal
increase of 10.1 per cent in the first two quarters of 2014, from €647.3 million
in the first half of 2013 to €712.7 million in the same period of 2014.
The increase in GFCF was underpinned by increases in both Government
investment of 40.1 per cent, equivalent to €36.9 million, and private investment
of 5.1 per cent, equivalent to €28.4 million. Growth in Government investment
is largely the result of a one-off purchase of new transport equipment and other
investment in road infrastructure and construction projects, whilst growth in
private investment is attributed to increases in the investment of the other
construction and the metal production and machinery subcategories which more
than offset the declines registered in all other subcategories.
Gross Fixed Capital Formation
Table 2.3
2010
2011
2012
2013
2013
2014
Jan-Jun
Jan-Jun
712.7
At Current Market Prices
Gross Fixed Capital Formation (€ million)
1,411.6
1,226.0
1,259.7
1,314.1
647.3
26.6
(13.2)
2.8
4.3
2.6
10.1
GDP (€ million)
6,599.5
6,894.4
7,178.9
7,510.1
3,626.4
3,791.0
(GFCF/GDP) %
21.4
17.8
17.5
17.5
17.9
18.8
1,411.6
1,170.5
1,161.6
1,187.3
585.4
640.2
26.4
(17.1)
(0.8)
2.2
1.1
9.4
GDP (€ million)
6,599.5
6,747.5
6,879.9
7,052.5
3,300.6
3,406.4
(GFCF/GDP) %
21.4
17.3
16.9
16.8
17.7
18.8
% change
At Chain Linked (2010) Volumes
Gross Fixed Capital Formation (€ million)
% change
Source: National Statistics Office
18
Economic Survey November 2014
Further analysis of the components of investment indicates a significant increase
in the construction subsector mainly driven by increases in the other construction
subcategory (24.2 per cent) and other products subcategory (5.5 per cent), which
compensated for the decline in housing investments (9.6 per cent). During this
period, investment in equipment also registered increases. This was attributed
to the positive performance of the metal products and machinery equipment
subcategory (14.4 per cent) which helped mitigate the decline registered in the
transport equipment subcategory (2.3 per cent).
During the first half of 2014, the ratio of GFCF to nominal GDP increased by
0.9 percentage points to reach 18.8 per cent. In real terms, the ratio increased
from 17.7 per cent in the first half of 2013 to 18.8 per cent in the comparable
period of 2014. Gross fixed capital formation in nominal and constant terms
together with the ratio of GFCF to GDP is presented in Table 2.3.
Foreign Demand and Supply
Developments in the external sector, particularly the modest, uneven recovery
in global activity and the resultant pick up in world trade have led to marginal
improvements in the performance of the external side of the Maltese economy
in the first half of 2014 over the same period of last year. During this period, real
exports fell by 1.4 per cent whilst real imports fell by 2.0 per cent, so that net
exports contributed positively towards economic growth. These developments
represent relative improvements when compared to performance recorded in
the same period of 2013 where real exports and imports declined by 3.1 per
cent and 3.2 per cent, respectively. In nominal terms, exports fell by 0.4 per
cent whilst imports declined by 1.7 per cent in the first half of 2014.
During the first half of 2014, imports of goods in real terms registered an increase
of 2.5 per cent but declined by 5.9 per cent in nominal terms as the prices of
imported goods fell. Imports of services declined by 4.5 per cent in real terms
but increased 0.6 per cent as price of service imports increased. A marginally
higher volume of exports of goods of 0.2 per cent was recorded in the first half
of 2014. However, due to a substantial drop in the price of exported goods,
the nominal value of goods exports decreased by 7.5 per cent. Meanwhile,
exports of services decreased by 2.0 per cent during the first half of 2014 but
increased by 2.1 per cent in nominal terms as price of service exports increased.
A more disaggregated analysis reveals that the nominal decline in imports of
goods was primarily driven by declines in machinery and transport equipment
as well as in miscellaneous manufactured articles and in food. Similarly, the
decrease in exports of goods was primarily the result of declines in the exports of
Economic Survey November 2014
19
machinery and transport equipment and to a lesser extent, the result of declines
in miscellaneous manufactured articles and in food.
Sectoral Growth in Gross Value Added
Gross Value Added (GVA) is defined as the value generated by units engaged
in production activities and is obtained by taking the excess of output over
intermediate consumption. Intermediate consumption consists of the value of
goods and services consumed as inputs in the production process, excluding
the consumption of fixed assets. Gross value added at basic prices does not
include taxes less subsidies on products as output is valued at basic prices,
while intermediate consumption is measured at purchasers’ prices. The sectoral
contributions to growth in GVA during the Survey period are shown in Chart
2.2 whereas the growth in GVA at sectoral level at basic prices is shown in
Table 2.4.
During the Survey period, GVA at basic prices increased by 3.6 per cent
compared with a 5.0 per cent increase in the same period of 2013, primarily
reflecting a relatively subdued growth in turnover. Growth in GVA at basic
prices is primarily attributable to a positive performance in services (except
for financial and insurance activity). Manufacturing activity was uneven with
an overall decline being registered. GVA in agriculture and fisheries declined
whilst the construction industry registered a positive turnaround. Significant
increases were recorded in the public administration and defence, compulsory
social security, education, human health and social work activities sector,
in the wholesale and retail trade, transportation and accommodation sector,
in the professional, scientific and technical activities sector and in the arts,
entertainment and recreation, repair of household goods and other services
sector.
During the period under analysis, GVA at basic prices in agriculture, forestry
and fishing fell by €3.5 million, from €49.7 million in the first half of 2013 to
€46.2 million in the same period of 2014, mainly reflecting declines in crop
and animal production, hunting and related service activities.
The construction industry showed signs of a robust recovery during the first half
of 2014 as GVA in this sector increased by 3.1 per cent or €4.4 million when
compared to the same comparable period last year. This positive performance
contrasts with the declining trend that prevailed in the first half of 2012 and
2013, whereby a decline of 1.0 per cent and a decline of 2.2 per cent were
registered respectively.
20
Economic Survey November 2014
Chart 2.2
Contribution to Growth in Gross Value Added
Percentage Points
Gross Value Added
Arts, entertainment and recreation
Public administration, education & human health
Professional, scientific and technical activities
Real estate activities
Financial and insurance activities
Information & communication
Wholesale & retail; transportation; & accommodation*
Construction
of which Manufacturing
Electricity, Water, & Manufacturing**
Agriculture & fishing
-1
0
Jan-June 2014
1
2
3
4
5
6
Jan-June 2013
*Includes food services activities
**Includes quarrying
Sectoral Gross Value Added
(at basic prices)
Table 2.4
€ million
2010
Agriculture, forestry and fishing
Mining and quarrying; manufacturing; and utilities
of which Manufacturing
Construction
Wholesale and retail trade; repair of motor vehicles and motorcycles;
transportation and storage; accommodation and food service
activities
2011
2012
2013
2013
2014
Jan-Jun
Jan-Jun
96.1
94.1
99.6
108.5
49.7
46.2
893.6
874.4
833.8
856.0
435.8
423.5
749.7
790.4
802.3
745.5
380.7
367.9
270.3
285.3
283.5
279.5
138.9
143.3
1,236.9
1,303.8
1,402.9
1,464.1
681.1
713.8
Information and Communication
319.7
370.8
391.2
431.2
211.3
225.7
Financial services
452.0
455.5
522.3
516.2
264.8
245.1
Real estate activities
347.1
373.6
367.2
375.3
186.5
192.5
Professional, scientific and technical activities; administrative and
support service activities
536.5
567.6
598.1
666.4
309.4
336.3
1,061.7
1,113.5
1,181.4
1,248.1
617.1
666.8
576.7
578.8
618.2
637.9
317.4
335.0
5,790.8
6,017.4
6,298.3
6,583.4
3,212.1
3,328.3
Public administration and defence; compulsory social security;
education; human health and social work activities
Arts, entertainment and recreation, repair of household goods and
other services
Gross Value Added
Source: National Statistics Office
Economic Survey November 2014
21
During the same period, GVA in the wholesale and retail trade, repair of motor
vehicles and motorcycles, transportation and storage, accommodation and food
services increased by €32.7 million or 4.8 per cent. At a more disaggregated
level, GVA at basic prices in the wholesale and retail trade sector in the
January-June 2014 period stood at €361.2 million, a rise of 3.8 per cent when
compared to the same period in 2013. On the other hand, the transportation
and storage sector increased by 3.9 per cent to €202.5 million. Meanwhile, the
accommodation and food service activities sector registered a rise of 8.5 per
cent in GVA at basic prices, amounting to €11.8 million.
The manufacturing sub-sector’s GVA declined by €12.8 million or 3.4 per cent
during the first two quarters of 2014 over the same period of 2013. This decrease
follows the downward trend that prevailed in the first half of 2012 and 2013
where declines of 2.1 per cent and 3.6 per cent were registered respectively
in comparison to the corresponding period of the previous year. At the same
time, a more detailed analysis reveals that the decline in manufacturing was not
broad-based. Indeed, significant increases were recorded in the manufacturing
of fabricated metal products, except machinery and equipment (€9.7 million),
in the manufacture of motor vehicles, trailers and semi-trailers (€3.1 million),
in the manufacture of furniture (€2.4 million) and in the manufacture of rubber
and plastic products (€1.7 million). On the other hand, there were significant
declines in the manufacture of computer, electronic and optical products
(€13.6 million), in the manufacture of basic pharmaceutical products and
pharmaceutical preparations (€7.7 million), in the printing and reproduction of
recorded media (€5.6 million) and in the manufacture of textiles (€2.2 million).
During the first two quarters of 2014, the financial and insurance activities
reported a decline in GVA of 7.4 per cent, equivalent to €19.7 million, when
compared with the same period in 2013. At a more disaggregated level, this
decline was predominantly the result of a decline in the activities auxiliary to
financial and insurance activities (€15.8 million) and a decline in the financial
service activities, (€9.8 million). A closer look, however, reveals that this decline
was not broad-based but was largely prompted by overseas developments
effecting two players in the industry. Specifically, one company involved in
lending and brokerage reduced the scale of its operations in Malta following
changes in regulations abroad whilst a subsidiary bank operating in Malta
was sold as part of its parent company’s restructuring plan to downsize its
overseas investments. On the other hand, an increase was recorded in insurance,
reinsurance and pension funding (€5.2 million).
The information and communication sector registered an increase in GVA of
22
Economic Survey November 2014
6.8 per cent in the first half of 2014, equivalent to €14.4 million, thus reaching
the level of €225.7 million by the end of the period under analysis.
GVA in the professional, scientific and technical activities; administrative and
support services activities increased by €27.0 million or 8.7 per cent. This
increase follows the upward trend that prevailed in the corresponding period of
the previous years. GVA in the public administration and defence, compulsory
social security, education, human health and social work activities sector
increased by 8.0 per cent during the Survey period. At the same time, GVA in
the sector comprising arts, entertainment and recreation, repair of household
goods and other services increased by 5.6 per cent, as the developments in the
gambling and betting activities continue to underpin the positive performance
of this sector.
Gross Domestic Product from the Income Approach
Compensation of employees increased by 5.6 per cent (or €93.4 million)
during the first half of 2014 compared to an increase of 4.7 per cent for the
same period of 2013. This increase was attributed to employee compensation
growth registered in all sectors of the economy, with the exception of
agriculture, forestry and fishing sector. Notable increases were recorded in
the compensation of employees in the public administration and defence,
compulsory social security, education, human health and social work activities
sector, in the professional, scientific and technical activities sector, in the
wholesale and retail trade, transportation, accommodation and food services
sector as well as in the financial and insurance activities sector. During the
first six months of 2014, the share of employee compensation to GDP at
market prices increased by 0.5 percentage points to 46.1 per cent, as the
growth rate in the compensation of employees exceeded the rate of GDP
growth. Chart 2.3 illustrates the developments in compensation of employees
at market prices over the period 2010-2013 and the first two quarters of 2014.
Compensation per employee as measured by average nominal weekly gross
wages and salaries per employee stood at €380.72 during the first half of 2014,
up by 2.3 per cent from the same comparable period of 2013. In real terms,
average weekly compensation during the first half of 2014 stood at €352.40
compared to €345.80 in the same period of the previous year. This represents
an increase of 1.9 per cent. These robust growth rates in compensation per
employee are underpinned by a strong increase in nominal compensation of
employees reflecting the resilient growth in employment. It is noteworthy that
data in respect of wages and salaries relates to national accounts data and hence
Economic Survey November 2014
23
Chart 2.3
Compensation of Employees
Y-O-Y Percentage Change
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2013Q1
2013Q3
2014Q1
incorporate the earnings of both full-time and part-time primary employees,
with the latter becoming increasingly more relevant, partly as a result of the
increasing female participation in the economy. Furthermore, in estimating
average weekly wages per employee, the segment of National Insurance
contribution paid by employers is excluded from calculations. Real average
weekly wage figures were obtained by deflating the latter using inflationary
developments in the Retail Price Index (RPI). Developments in wages and
salaries are shown in Chart 2.4 and Table 2.5.
Meanwhile, taxes on production and imports increased by 11.9 per cent,
equivalent to €52.7 million during the first two quarters of 2014 while subsidies
increased by 19.3 per cent, equivalent to €8.2 million when compared to the
same comparable period last year. This resulted in an increase in net taxes of
€44.6 million or 11.1 per cent during the first half of 2014. Developments in
GDP from the income approach are presented in Table 2.6.
In view of the moderate increase in gross value added and the relatively strong
increase in compensation of employees and net tax intake, gross operating
surplus and mixed income increased moderately by €26.7 million or 1.7 per cent
during the first half of 2014, compared to an increase of 5.3 per cent during the
same comparable period last year. This relative slowdown in growth resulted
in a decline in the ratio of gross operating surplus to GDP at market prices of
1.2 percentage points to 42.1 per cent.
24
Economic Survey November 2014
Chart 2.4
Average Weekly Compensation per Employee
(excludes employers' N.I. contributions)
Euro
390
380
370
360
350
340
330
320
310
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
Nominal
2012Q3
2013Q1
2013Q3
2014Q1
Real
Average Weekly Wage per Employee*
Table 2.5
Nominal
Real**
Value
Change
Value
Change
€
%
€
%
2010
345.7
2.1
341.1
0.6
2011
358.7
3.7
344.5
1.0
2012
372.6
3.9
349.5
1.4
2013
372.1
(0.2)
344.2
(1.5)
2013 (Jan-Jun)
372.1
0.6
345.8
(1.2)
2014 (Jan-Jun)
380.7
2.3
352.4
1.9
*Excludes employers’ National Insurance contributions
**Base year of RPI index (December 2009=100)
Source: National Statistics Office
Economic Survey November 2014
25
Gross Domestic Product from the Income Side
Table 2.6
€ million
2010
Compensation of employees
2011
2012
2013
2013
2014
Jan-Jun
Jan-Jun
2,845.3
3,035.8
3,210.6
3,340.3
1,654.2
1,747.5
2,961.5
2,995.8
3,116.7
3,274.4
1,570.9
1,597.6
865.4
927.9
943.9
990.9
443.5
496.2
72.6
65.1
92.3
95.6
42.2
50.4
6,599.5
6,894.4
7,178.9
7,510.1
3,626.4
3,791.0
Gross operating surplus
and mixed income
Taxes on production and
imports
Less Subsidies
Gross Domestic Product
at current market prices
Source: National Statistics Office
Gross National Income
Gross National Income (GNI) is calculated by adjusting Gross Domestic
Product at market prices for net compensation received from or paid to the
rest of the world, subsidies less taxes from/to the rest of the European Union
and net income property from the rest of the world. Hence, GNI represents the
total primary income receivable by resident institutional units irrespective of
where that income was generated.
During the first six months of 2014, GDP at market prices increased by €164.6
million, or by 4.5 per cent. Due to the net payments on property income
from abroad, GNI at current market prices has typically been less than GDP.
Nevertheless, during the first half of 2014, the net property income payments
declined by €19.0 million to a net outflow of €164.0 million. On the other
hand, net outflows by way of compensation of employees remained practically
unchanged whilst net subsidies received from the EU increased marginally over
the Survey Period. Developments in GNI are shown in Table 2.7. As a result of
these developments, GNI increased by 5.4 per cent during the first half of 2014.
26
Economic Survey November 2014
Gross National Income
Table 2.7
€ million
2010
2011
2012
2013
2013
2014
Jan-Jun
Jan-Jun
Gross Domestic Product
at current market prices
6,599.5
6,894.4
7,178.9
7,510.1
3,626.4
3,791.0
-3.2
1.4
-3.8
-1.5
-1.1
-1.1
7.1
3.4
7.9
11.5
3.9
5.7
-282.2
-251.7
-338.7
-350.0
-182.9
-164.0
6,321.3
6,647.5
6,844.3
7,170.1
3,446.2
3,631.6
Net compensation of employees
from the rest of the world
Subsidies less Taxes on
products from/to the rest of
the EU
Net property income from the
rest of the world
Gross National Income
at current market prices
Source: National Statistics Office
Footnotes:
1
The data presented in this Chapter is based on national accounts data compiled according to
the European Systems of Accounts (ESA10) methodology.
2
Gross Domestic Product at current market prices is estimated by the National Statistics Office
(NSO) from the production side, involving the aggregation of the output of various productive
sectors net of the cost of intermediate inputs. A reconciliation of the production side with estimates
of expenditure on output produced is then carried out and the residual between the two approaches
is included in the changes in inventories component.
3
Over the short-term international trade data may be affected by fuel imports and re-exports.
According to data for the first half of the year, fuel accounted for around 46.0 per cent of exports
of goods and 44.0 per cent in imports of goods.
Economic Survey November 2014
27
3. Employment
3. Employment
This Chapter presents an overview of developments in the labour market,
covering the period from 2011 up to the first half of 2014. The main source of
data is the Labour Force Survey (LFS)1 as it enables comparison across EU
Member States. Nevertheless, administrative records of the Employment and
Training Corporation (ETC) are also used to analyse sectoral developments of
employment activity. The classification of this data is based on NACE Rev. 2.
It is to be noted that LFS data is not directly comparable to statistics originating
from the ETC primarily due to differences in the definitions and methodology
underpinning the two databases.
Labour Market Developments
The labour market continued to perform well during the first half of 2014 as
increases in the activity rate translated into higher employment whilst at the
same time the unemployment rate decreased in comparison to 2013. Overall,
the positive patterns of labour market dynamics were exhibited by the majority
of segments of the Maltese labour market. Sustained employment growth in
sectors which were relatively resilient to the international financial and economic
crisis ensured that the performance of the labour market continued to improve,
whilst positive employment developments in private direct production also
contributed to labour demand.
Recent Employment Trends
By the end of the second quarter of 2014, the labour force for persons aged 15
and over (i.e. the total number of people employed plus unemployed) increased
to 187,893, reflecting an increase of 698 or 0.4 per cent over the second quarter
of 2013.
During the same period, total employment increased by 2,126 or 1.2 per cent to
176,969. This reflected an increase in female employment of 1,821 or 2.8 per
cent from 65,507 in the second quarter of 2013 to 67,328 in the second quarter
of 2014 as well as an increase in male employment from 109,336 in the second
quarter of 2013 to 109,641 in the second quarter of this year. Consequently, at
the end of this period, male employment accounted for 62.0 per cent of total
employment while female employment accounted for the remaining 38.0 per
cent. It is to be highlighted that throughout the same period, the percentage
increase of females in employment exceeded that in the labour force thus
sustaining the underlying trend of a rising female employment rate.2
Economic Survey November 2014
31
The unemployment rate during the second quarter of 2014 stood at 5.8 per cent,
0.8 percentage points lower than that recorded in the second quarter of 2013.
This reflected decreases in both the male and female unemployment rates. In
fact, the former decreased by 0.7 percentage points to 6.0 per cent while the
latter decreased by 0.9 percentage points to 5.6 per cent. The developments
outlined above are presented in Table 3.1.
The ratio of part-time employment over total employment continued to increase,
rising from 11.1 per cent in 2011 to 12.4 per cent in 2013 and further up to
13.6 per cent by mid-2014. As shown in Table 3.2, the latter result reflected
an increase of 2,738 workers in part-time jobs – which exceeded that of fulltime employment (1,215) – and a decline in full-time with reduced hours jobs
(1,827). In addition, females accounted for a smaller share of the increase in
part-time employment than males. The share of full-time jobs with reduced
hours also increased over the period 2011 to 2013 from 2.3 per cent in 2011 to
2.7 per cent in 2013. However, it declined again from 3.2 per cent in the second
Labour Market Performance (Persons aged 15 and over)
Labour Force Survey
Table 3.1
2011
2012
2013
2013
Apr-June
2014
Apr-June
Labour Supply
Male
Female
177,970
115,064
62,906
181,731
114,805
66,926
187,436
116,776
70,660
187,195
117,153
70,042
187,893
116,602
71,291
Employment
Male
Female
166,628
108,203
58,425
170,249
108,224
62,025
175,472
109,231
66,241
174,843
109,336
65,507
176,969
109,641
67,328
11,342
6,861
4,481
11,482
6,581
4,901
11,964
7,545
4,419
12,352
7,817
4,535
10,924
6,961
3,963
167,906
56,447
111,459
167,371
58,382
108,989
165,310
58,543
106,767
165,086
57,895
107,191
167,794
60,384
107,410
6.4
6.0
7.1
6.3
5.7
7.3
6.4
6.5
6.3
6.6
6.7
6.5
5.8
6.0
5.6
Unemployment
Male
Female
Inactive Persons
Male
Female
Unemployment Rate
Male
Female
The figures for years 2011, 2012 and 2013 are revised and were published only on the Eurostat website.
Source: National Statistics Office
32
Economic Survey November 2014
Distribution of Employed Persons
by Type of Employment in Main Occupation
Table 3.2
2011
2012
2013
2013
Apr-June
2014
Apr-June
Full-time job
Full-time job with reduced hours job
Part-time job
144,267
3,830
18,531
146,295
4,062
19,892
148,842
4,807
21,823
147,896
5,558
21,389
149,111
3,731
24,127
Total
166,628
170,249
175,472
174,843
176,969
The figures for years 2011, 2012 and 2013 are revised and were published only on the Eurostat website.
Source: National Statistics Office
quarter of 2013 to 2.1 per cent in the second quarter of 2014. A detailed sectoral
breakdown of employment is provided further on in this Chapter.
In the second quarter of 2014, the employment rate (defined as the number of
persons engaged in employment as a per cent of the population of working
age) stood at 61.6 per cent, following an increase of 1.0 percentage points over
the second quarter of 2013. Table 3.3 shows that this development reflected
an increase in the female employment rate of 1.8 percentage points to 48.2 per
cent and an increase in the male employment rate of 0.3 percentage points to
74.6 per cent. Overall, the observed developments over this period are in part a
continuation of past trends. Indeed, between 2011 and 2013, the employment rate
continued to exhibit an upward trend, rising from 57.9 per cent in 2011 to 60.8
per cent in 2013. During the same three-year period, the female employment rate
improved by 5.5 percentage points to 47.0 per cent, while the male employment
rate decreased marginally by 0.1 percentage points in 2012 and rose by 0.3
percentage points to reach 74.1 per cent in 2013.
Turning to the age distribution of employment rate presented in Table 3.3, it is
noted that in the second quarter of 2014 the highest employment rate (75.1 per
cent) was observed in the age group 25-54, followed by the age groups 15-24
(44.0 per cent), and 55-64 (37.9 per cent). The gender distribution shows that
males have a higher employment rate in all age groups. However, the female
employment rate has been converging to the male employment rate in all age
brackets. Furthermore, age group 15-24 exhibits the narrowest gender gap,
while age group 55-64 has the widest gender gap in employment rate.
Economic Survey November 2014
33
Employment Rates by Age
Table 3.3
2011
2012
2013
2013
Apr-June
2014
Apr-June
Total (15-64)
Male
Female
57.9
73.9
41.5
59.1
73.8
44.0
60.8
74.1
47.0
60.6
74.3
46.4
61.6
74.6
48.2
15-24
Male
Female
45.0
48.1
41.8
43.8
46.7
40.7
46.0
47.5
44.3
44.3
46.1
42.4
44.0
45.7
42.2
25-54
Male
Female
70.7
90.0
50.8
72.5
89.7
54.9
74.0
89.6
57.8
74.4
90.6
57.7
75.1
89.8
59.8
55-64
Male
Female
33.2
51.5
15.1
34.6
53.1
16.3
36.2
53.8
18.7
35.7
53.5
18.0
37.9
56.1
19.9
The figures for years 2011, 2012 and 2013 are revised and were published only on the Eurostat
website.
The methodology applied to the activity and/or the employment rate used by Eurostat is different
than that used by the NSO thus the figures may differ slightly.
Source: National Statistics Office
Moreover, such changes in employment rates by age and gender are fairly in line
with past trends, such that between 2011 and 2012 most changes in employment
rates were a result of improvements in the female employment in all age groups,
particularly in the age group 25-54 in which an increase of 7.0 percentage
points was recorded in the female employment rate. By contrast, during the
three-year period to 2013, the only age bracket that reported an increase in the
male employment rate was 55-64, which increased by 2.3 percentage points.
Meanwhile the female employment rate for the age group 55-64 increased by
3.6 percentage points to stand at 18.7 per cent in 2013.
Developments in the Unemployment Rate
According to the LFS, during the period April to June 2014, the number of
unemployed persons stood at 10,924, following a decrease of 1,428 when
compared to the same period a year earlier. Consequently, the unemployment
rate (defined as unemployed persons as a percentage of the labour force)
34
Economic Survey November 2014
decreased by 0.8 percentage points, from 6.6 per cent in the second quarter of
2013 to 5.8 per cent, as shown in Table 3.1. This reflects increases in job creation
which exceeded the rising labour force participation. Statistics for the period
2011 to 2013 indicate that the unemployment rate was relatively unchanged,
hovering around 6.4 per cent. Meanwhile, more recent statistics released by
Eurostat indicate that the deseasonalised harmonised unemployment rate in
September 2014 stood at 5.8 per cent, reflecting declines in the unemployment
rate attained in 2014.
During the year to the second quarter of 2014, the number of unemployed males
and females decreased by 856 and 572 to reach 6,961 and 3,963, respectively.
As a result, men accounted for 63.7 per cent of the total unemployment
whereas women accounted for the remaining 36.3 per cent. In June 2014, the
female unemployment rate stood at 5.6 per cent, a decrease of 0.9 percentage
points when compared to the second quarter of 2013. Furthermore, the male
unemployment rate declined by 0.7 percentage points to 6.0 per cent. When
compared to the period between 2011 and 2013, the recent unemployment
developments reflect a reversal of the upward trend in the male unemployment
rate and a sustained fall in the female unemployment rate.
Table 3.4 shows that, similar to the trends experienced in the EU, the
unemployment rate is relatively higher for young individuals below 25 as
compared with 25-plus age groups. Indeed this trend continued in the first half
of 2014 as the youth unemployment rate stood at 13.0 per cent whilst that for
persons aged 25-plus, stood at 4.6 per cent. Nevertheless, during the same period,
the decline in youth unemployment rate which fell sharply by 2.7 percentage
points was higher than that for persons aged 25-plus which decreased by 0.3
percentage points.
Chart 3.1 presents the monthly harmonised deseasonalised unemployment rate
for Malta. In spite of the observed volatility, the harmonised unemployment
rate generally followed a downward trend to reach 6.3 per cent in December
2012. Marginal increases were registered in 2013 due to strong positive
increases in the activity rate. However, during the first eight months of 2014,
the unemployment rate declined from 6.2 per cent in January to 5.8 per cent
in September, as increases in participation rates were translated into increases
into higher employment levels.
Economic Survey November 2014
35
Unemployment Rates by Age
Table 3.4
Total (15-74)
15-24
25-74
2011
2012
2013
2013
Apr-June
2014
Apr-June
6.4
13.3
5.0
6.3
14.1
4.9
6.4
13.0
5.2
6.6
15.7
4.9
5.8
13.0
4.6
Source: National Statistics Office
Chart 3.1
Harmonised Deseasonalised
Unemployment Rate
7.5
7.3
7.1
6.9
6.7
6.5
6.3
6.1
5.9
5.7
Jul-14
Apr-14
Jan-14
Jul-13
Oct-13
Apr-13
Oct-12
Jan-13
Jul-12
Apr-12
Jan-12
Jul-11
Oct-11
Apr-11
Oct-10
Jan-11
Jul-10
Apr-10
Jan-10
5.5
Source: Eurostat
36
Economic Survey November 2014
General Labour Market Developments in the Euro Area and
the EU
The depth and duration of the decline in international economic activity led to
a fragile labour market dynamics in the EU, but continued to vary substantially
between Member States. As shown in Chart 3.2, the rate of employment growth
– measured as the second quarter year-on-year growth rate – was robust in
Hungary (4.8 per cent), Luxembourg (3.4 per cent), Slovenia (2.9 per cent),
and the United Kingdom (2.8 per cent) while employment losses were recorded
in Romania (7.1 per cent), Estonia (1.2 per cent), the Netherlands (0.9 per
cent), and Finland (0.7 per cent). With a rate of 1.3 per cent, Malta recorded
an employment growth rate similar to Austria, Sweden, Bulgaria, and Croatia
which in turn was higher than the Euro Area (0.3 per cent) and EU28 (0.6 per
cent) averages.
During the second quarter of 2014, the evolution of the employment rate for
the age group 15-64 showed different patterns across Member States. The
employment rate for the EU28 increased by 0.8 percentage points to 64.9 per
cent while the employment rate of the Euro Area improved by 0.3 percentage
points to stand at 63.9 per cent. As shown in Table 3.5 and Chart 3.3, Hungary
(61.7 per cent), Portugal (62.6 per cent), and Latvia (66.6 per cent) registered the
highest increases in employment rates. Until mid-2014, the highest employment
Chart 3.2
Employment Growth Rate
Apr-June 2013 - Apr-June 2014
per cent
6
4
2
0
-2
-4
Economic Survey November 2014
Hungary
Slovenia
Luxembourg
United Kingdom
Ireland
Portugal
Poland
Croatia
Bulgaria
Malta
Sweden
Spain
Austria
Slovakia
Lithuania
EA18
EU28
Denmark
Germany
France
Czech Republic
Cyprus
Italy
Latvia
Finland
Belgium
Estonia
Netherlands
Romania
-8
Greece
-6
37
Employment Rates across EU
Table 3.5
EU28
EA18
Belgium
Bulgaria
Czech Republic
Denmark
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
2013
Apr-June
2014
Apr-June
64.1
63.6
62.0
59.5
67.8
73.0
73.3
69.4
60.2
49.1
54.8
64.3
53.1
55.7
61.5
64.9
63.9
61.9
61.0
68.7
72.7
73.4
69.2
61.3
49.4
56.0
64.5
54.6
55.7
62.2
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Romania
Slovenia
Slovakia
Finland
Sweden
United Kingdom
2013
Apr-June
2014
Apr-June
64.8
63.8
65.4
58.3
60.6
74.4
72.5(b)
59.8
60.4
60.2
63.0
59.8
70.3
74.6
70.4
66.6
65.1
66.7
61.7
61.6
73.6
72.8
61.3
62.6
61.2
64.5
60.7
70.0
75.0
71.9
(b) break in time series
Source: Eurostat
Chart 3.3
Change in Employment Rate
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
38
Netherlands
Denmark
Finland
Estonia
Belgium
Italy
Germany
France
EA18
Greece
Austria
Sweden
Cyprus
EU28
Czech Republic
Slovakia
Malta
Romania
Ireland
Spain
Lithuania
Luxembourg
Bulgaria
Croatia
Poland
Slovenia
United Kingdom
Latvia
Portugal
Hungary
Apr-June 2013 - Apr-June 2014 (percentage points)
Economic Survey November 2014
rate was observed in Sweden (75.0 per cent), followed by the Netherlands
(73.6 per cent), and Germany (73.4 per cent). Meanwhile, Malta (61.6 per
cent) recorded a percentage point increase in the employment rate over the
same period. Despite the positive and steady development in the employment
rate for Malta over recent years, the rate remains 3.3 percentage points and
2.3 percentage points below the rates for the EU28 and Euro Area average,
respectively. Nonetheless, the gaps between Malta and the EU28, and between
Malta and the Euro Area have been reduced by around 0.2 and 0.7 percentage
points, respectively over the same period.
Table 3.6 shows that in the second quarter of 2014, the EU unemployment rate
Unemployment Rates across EU
Table 3.6
EU28
EA18
Belgium
Bulgaria
Czech Republic
Denmark
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Romania
Slovenia
Slovakia
Finland
Sweden
United Kingdom
2010
2011
2012
2013
2013
Apr-June
2014
Apr-June
9.6
10.1
8.3
10.3
7.3
7.5
7.1
16.7
13.9
12.7
19.9
9.3
12.3
8.4
6.3
19.5
17.8
4.6
11.2
6.9
4.5 (b)
4.4
9.7 (b)
12.0
7.0
7.3
14.5
8.4
8.6
7.8
9.6
10.1
7.2
11.3
6.7
7.6
5.9
12.3
14.7
17.9
21.4
9.2
13.9
8.4
7.9
16.2
15.4
4.8
10.9
6.4
4.4
4.2
9.7
12.9
7.2
8.2
13.7
7.8
7.8
8.1
10.4
11.3
7.6
12.3
7.0
7.5
5.5
10.0
14.7
24.5
24.8
9.8
16.1
10.7
11.9
15.0
13.4
5.1
10.9
6.3
5.3
4.3
10.1
15.8
6.8
8.9
14.0
7.7
8.0
7.9
10.8
11.9
8.4
13.0
7.0
7.0
5.3
8.6
13.1
27.5
26.1
10.3
17.3
12.2
15.9
11.9
11.8
5.9
10.2
6.4
6.7
4.9
10.3
16.4
7.1
10.1
14.2
8.2
8.0
7.6
10.8
11.9
8.1
13.0
6.8
6.7
5.3
8.0
13.9
27.3
26.1
10.1
16.8
12.0
15.5
11.4
11.7
5.6
10.3
6.6
6.6
4.5
10.5
16.7
7.3
10.4
14.0
9.1
8.7
7.6
10.1
11.4
8.2
11.4
6.0
6.3
5.0
6.9
11.9
26.6
24.5
9.9
16.6
12.3
15.5
10.7
11.2
5.8
8.0
5.8
7.0
4.7
9.1
14.1
6.7
9.3
13.2
9.6
8.7
6.2
(b) break in time series
Source: Eurostat
Economic Survey November 2014
39
recorded marginal improvements from the rates recorded during the previous
year. The EU28 and the Euro Area unemployment rates were 10.1 per cent
and 11.4 per cent, down from 10.8 per cent and 11.9 per cent respectively.
The unemployment rate in most EU countries remains nonetheless very
high. Between April and June 2014, among the Member States, the lowest
unemployment rates were recorded in Austria (4.7 per cent), Germany (5.0 per
cent), and Malta and Luxembourg (both 5.8 per cent). Conversely, the highest
on record were those in Greece (26.6 per cent) and Spain (24.5 per cent).
The unemployment rate for the majority of EU28 Member States remained
above that recorded in 2010 by, on average, 3.4 percentage points. On the other
hand, Member States that registered notable declines in the unemployment
rate, albeit starting from high levels, were Estonia (-8.1 percentage points),
Latvia (-7.6 percentage points), and Lithuania (-6.0 percentage points). Over
the same period, Germany, Czech Republic, Denmark and Malta registered a
fall in the unemployment rate over the three-year period, in spite of having a
comparably low rate in 2010.
Sectoral Employment
The analysis of sectoral employment in the labour market presented in this
section is based on administrative records compiled by the Employment and
Training Corporation (ETC). This section covers the period from December
2011 to December 2013 and, on the basis of more recent data, the period between
May 2013 and May 2014. Data on registered unemployed persons is also used
to shed light on the profile of unemployed persons up to September 2014.
The ETC regularly revises provisional data in line with its objective of
maintaining a continuous update of labour market data. It is also noteworthy
that 3,050 full-time employees who were formerly classified as employees
of the Ministry for Resources and Rural Affairs (MRRA) were reclassified to
either the Ministry of Sustainable Development, Environment and Climate
Change or the Ministry for Transport and Infrastructure. Therefore, the data
in this Chapter are not directly comparable with those presented in previous
issues of the Economic Survey.
Employment trends in Malta point towards increased reliance of market services
as the main generator of employment. These developments are in line with the
trends noted in previous years. Indeed, between December 2011 and December
2013, employment in private market services increased by 7,108 or 9.1 per
cent, whilst the number of gainfully occupied in direct production remained, on
40
Economic Survey November 2014
average, stable. This highlights the fact that over the years Malta has become
more services-oriented. Meanwhile, public sector employment increased by
1,285 or 3.1 per cent, over the three-year period.
As shown in Table 3.7, at the end of May 2014, the full-time gainfully occupied
population increased by 5,432 or 3.5 per cent to reach 162,156 at the end of
Labour Market Indicators
Administrative Source
Table 3.7
2011
Dec
2012
Dec
2013
Dec
2013
May
2014
May
Labour Supply
Males
Females
157,143
104,461
52,682
159,493
104,645
54,848
166,342
107,748
58,594
164,016
106,910
57,106
169,297
109,285
60,012
Gainfully Occupied
Males
Females
150,556
99,307
51,249
152,682
99,366
53,316
158,941
102,111
56,830
156,724
101,325
55,399
162,156
103,844
58,312
Total Private Sector
Private Direct Production
Private Market Services
of whom Temporary Employment
109,420
31,172
78,248
501
111,672
31,038
80,634
463
116,520
31,164
85,356
417
114,966
31,539
83,427
433
118,577
31,851
86,726
412
Total Public Sector
of whom Temporary Employment
41,136
131
41,010
126
42,421
104
41,758
120
43,579
107
Registered Unemployed*
Males
Females
6,587
5,154
1,433
6,811
5,279
1,532
7,401
5,637
1,764
7,292
5,585
1,707
7,141
5,441
1,700
Self-Employed**
Males
Females
% of Gainfully Occupied
17,713
14,707
3,006
11.8
17,975
14,874
3,101
11.8
18,338
15,060
3,278
11.5
18,135
14,939
3,196
11.6
18,643
15,256
3,387
11.5
37,657
112,899
37,287
115,395
34,359
124,582
37,667
119,057
34,954
127,202
Total Private Sector Share
Total Public Sector Share
72.7%
27.3%
73.1%
26.9%
73.3%
26.7%
73.4%
26.6%
73.1%
26.9%
Part-time Employment as
Primary Job
29,785
31,646
33,295
32,736
34,794
Memorandum:
Total Direct Production***
Total Market Services***
*Includes both Parts I and II of the Registered Unemployed
**Included in the Private Sector
***Including temporary employees
Source: Employment and Training Corporation
Economic Survey November 2014
41
the period under analysis. This was mainly due to an expansion of 3,299 or
4.0 per cent in the private market services category and an increase of 312
or 1.0 per cent in the private direct production category. As a result of these
developments, the share of total private sector employment in the full-time
gainfully occupied population decreased marginally by 0.3 percentage points,
reaching 73.1 per cent at the end of May 2014. Employment in the public
sector (inclusive of temporary employees) increased marginally by 1,821 or
4.4 per cent over the year to 2014. Consequently, the share of public sector
employment in the gainfully occupied population increased to 26.9 per cent.
This latter development needs to be interpreted with caution, since an increase
of 756 full-time employees in the public sector, from May 2013 to May 2014,
reflected the temporary transfer of ownership of the public transport services.
On gender basis, the increase in the gainfully-occupied population recorded over
recent years was driven by a higher number of females in employment. In fact,
during the year to May 2014, the female component in gainfully employment
increased by 2,913 or 5.3 per cent while the male component rose by 2,519 or
2.5 per cent. Consequently, the share of males in full-time employment declined
by 0.6 percentage points to 64.0 per cent while the share of females in full-time
employment rose from 35.3 per cent to 36.0 per cent at the end of May 2014.
The number of self-employed persons has increased consistently during the
period under observation. In fact, by the end of May 2014, the number of selfemployed stood at 18,643, an increase of 508 or 2.8 per cent over May 2013.
The share of self-employed in the total gainfully occupied population remained
relatively unchanged at around 11.5 per cent. This development was driven by
increases amongst both males and females. Male self-employed recorded an
increase of 317 or 2.1 per cent over the one year period to May 2014, to stand at
15,256. During the same period, the number of female self-employed increased
by 191 or 6.0 per cent to stand at 3,387. Despite the increases recorded by female
self-employed, their share in total self-employed persons remained relatively
low in comparison to the share of females in the gainfully occupied population.
As shown in Table 3.7, labour supply increased by 9,199 or 5.9 per cent in the
three-year period from 2011 and 2013. Meanwhile, labour supply rose from
164,016 in May 2013 to 169,297 in May 2014, representing an increase of
5,281 or a growth rate of 3.2 per cent. The female labour supply was the main
driver behind the upward trend in the years up to December 2013. Indeed, they
increased by 5,912 persons or 11.2 per cent over the three year period, reaching
60,012 in May 2014. During the period between December 2011 and December
2013, the male component of the labour supply rose by 3,287 persons or 3.2
per cent to stand at 109,285 by the end of May 2014.
42
Economic Survey November 2014
Private Sector Employment
The upward trend recorded in employment in the private sector (inclusive of
temporary employees) over the period December 2011 to December 2013,
and more recently between May 2013 and May 2014, reflected a significant
expansion in employment in the private market services category. The increase
in private sector employment was also partly reinforced, albeit to a lesser extent,
by an increase in employment in the private direct production activities category.
As presented in Table 3.8, employment in private direct production at the end
of May 2014 stood at 31,851, an increase of 312 or 1.0 per cent over May 2013.
The declines that were mainly recorded in the twelve months to December 2012
were reversed in the subsequent twelve-month period. Consequently, by the
end of December 2013, the share of private direct production in total private
sector employment stood at 26.7 per cent, 1.7 percentage points lower than the
share recorded in December 2011. Meanwhile, by the end of May 2014, the
share of private market services in the total private sector employment stood
at 73.1 per cent.
Table 3.9 presents the sectoral contribution to employment growth. The higher
level of employment in direct production recorded between May 2013 and May
2014 reflected mainly developments in the construction sector. In fact, during the
year to May 2014, the construction sector recorded an increase of 155 employees
or 1.7 per cent. The manufacturing sector also contributed positively towards
employment growth as full-time employment increased by 137 persons or 0.7
per cent during the year to May 2014. Meanwhile, the electricity, gas, steam and
air conditioning supply; water supply and waste management; the agriculture,
hunting and forestry; and mining and quarrying sector also recorded increases
albeit significantly smaller.
Data for private sector employment confirms that, during the Survey period,
the primary source of job creation in the Maltese economy was market service
activities. As shown in Table 3.10, by the end of May 2014, total employment
stood at 86,726. The share of private market services in the total gainfully
occupied population went up from 53.2 per cent in May 2013 to 53.5 per cent in
May 2014. Table 3.10 shows that by the end of May 2014, wholesale and retail
(including repair of motor vehicles, motorcycles and personal and household
goods) stood out as the largest subsector (23,770) as it accounted for 27.4 per
cent of the private market service employment level. Professional, technical
and administrative activities recorded an employment of 17,531, while full-time
employment in accommodation and food service activities amounted to 10,094.
Economic Survey November 2014
43
Box 3.1
Developments in Private Sector Employment in Manufacturing
The manufacturing sector includes a wide range of production activities, from
small-scale enterprises using traditional production techniques to very large
enterprises which can reap economies of scale. Over the past years, the Maltese
economy has become increasingly service-oriented as the share of market
services constitutes the major part of employment in total gainfully occupied
population. The manufacturing industry, however, is still considered important
in terms of export market share and economy diversification. Consequently,
an analysis of the manufacturing sector as a whole sheds light on the diverse
performance of the manufacturing industry, since it comprises a wide spectrum
of activities within the non-financial business sector.
Private Manufacturing Employment*
Table 1
Mfg of Food Products, Beverages and
Tobacco
Mfg of Textiles and Leather Products
Mfg of Wood and Printing
Mfg of Coke, Chemical and Pharmaceutical Products
Mfg of Rubber, Plastic and Other Non-Metallic Products
Mfg of Basic Metals and Fabricated
Metal Products
Mfg of Computer, electronic equipment and machinery
Mfg of Transport Equipment
Mfg of Furniture
Manufacturing n.e.c.
Total Manufacturing Employment
2011
Dec
2012
Dec
2013
Dec
2013
May
2014
May
3,184
923
1,816
1,395
2,735
3,138
902
1,849
1,452
2,717
3,168
841
1,840
1,421
2,754
3,324
762
1,870
1,486
2,858
3,367
747
1,857
1,378
2,817
1,417
3,147
1,015
1,213
3,200
1,250
3,066
1,077
1,183
3,153
1,271
3,084
1,178
1,160
3,271
1,317
3,101
1,102
1,125
3,195
1,288
3,091
1,142
1,123
3,467
20,045
19,787
19,988
20,140
20,277
* Including temporary employees
Source: Employment and Training Corporation
The NACE division level classifies the manufacturing sector into 24 different
subsectors. In May 2014, the largest subsectors in terms of private sector
employment were the manufacture of food products (2,509), the manufacture
of computer, electronic and optical products (2,173), and other manufacturing
(2,085). This data, as presented in Table 1, also show that over the year to
May 2014, employment increased in the manufacturing n.e.c. (272), while the
largest declines in the manufacturing sector were recorded in the manufacturing
of coke, chemical and pharmaceutical products (108). Between December
44
Economic Survey November 2014
2011 and December 2013, the most notable increase was recorded in the
manufacturing of transport equipment (163). Meanwhile, the manufacturing
of basic metals and fabricated metal products (146) and the manufacturing of
textiles and leather products (82) accounted for the most significant declines
in the manufacturing sector over the same period.
Over the twelve-month period to May 2014, total employment increases
amounted to 3,299 or 4.0 per cent, originating mainly in activities related to
professional, technical and administrative activities (1,458), wholesale and retail
(582), and information and communication (356). All other sectors, except the
transport and storage subsector, registered increases in their employment levels.
Table 3.11 shows the main drivers of employment growth rate in market
services, namely, professional, technical and administrative activities; wholesale
and retail services; information and communication; financial and insurance
activities; health and social work; and arts, entertainment and recreation.
The professional, technical and administrative activities sub-sector increased
significantly by 1,458 over the year to May 2014. This increase reflects
positive advancement in advertising and market services; activities of head
offices; management consultancy activities; legal and accounting activities;
and activities relating to architectural and engineering activities, including
technical testing and analysis. This development is also a continuation of past
trends recorded during the period December 2011 to December 2013.
Another sub-sector reporting an increase in employment was the wholesale and
retail services, including repair of motor vehicles, motorcycles and personal
and household goods. Indeed, during the year to May 2014, employment in
this sector increased by 582 to 23,770. The significant share of this increase
comes from retail trade (except of motor vehicles and motorcycles activities)
sub-sector. Furthermore, when December 2013 is compared to December 2011,
employment within this sub-sector increased by 711.
The other significant contributors to employment growth in market services, as
outlined above, all contributed 0.4 percentage points each to the total private
market services employment growth rate, during the Survey period. Similar
developments were recorded throughout the three-year period ranging from
December 2011 to December 2013. The health and social work subsector grew
by 307 persons during the twelve-month period to May 2014. Throughout the
Economic Survey November 2014
45
Private Sector Employment*
Table 3.8
2011
Dec
2012
Dec
2013
Dec
2013
May
2014
May
Agriculture, forestry and fishing
Mining and Quarrying
Manufacturing
Electricity, gas, steam and air conditioning supply
Water supply and waste management
Construction
1,955
312
20,045
3
318
8,539
1,907
290
19,787
9
336
8,709
1,886
298
19,988
17
321
8,654
1,904
285
20,140
11
340
8,859
1,893
303
20,277
15
349
9,014
Total Employment in Direct Production
31,172
31,038
31,164
31,539
31,851
* Including temporary employees
Source: Employment and Training Corporation
Contribution to Growth in Private Sector Employment*
Direct Production
per cent
Table 3.9
Dec-2012/
Dec-2011
Dec-2013/
Dec-2012
May-2014/
May-2013
Agriculture, forestry and fishing
Mining and Quarrying
Manufacturing
Electricity, gas, steam and air conditioning supply
Water supply and waste management
Construction
-0.2
-0.1
-0.8
0.0
0.1
0.5
-0.1
0.0
0.6
0.0
0.0
-0.2
0.0
0.1
0.4
0.0
0.0
0.5
Total
-0.4
0.4
1.0
* Including temporary employees
46
Economic Survey November 2014
Employment in Market Services*
Table 3.10
2011
Dec
2012
Dec
2013
Dec
2013
May
2014
May
Wholesale and Retail (including Repair of
Motor Vehicles, Motorcycles and Personal
and Household Goods)
Transport and Storage
Accomodation and food service activities
Information and communication
Financial and insurance activities
Real estate activities
Professional, technical and administrative activties
Education
Health and social work
Arts, entertainment and recreation
Other service activties
22,908
6,875
9,427
4,363
6,289
976
14,190
3,991
2,680
3,203
3,346
23,229
6,983
9,744
4,656
6,419
957
14,915
4,275
3,009
3,193
3,254
23,619
7,077
9,805
5,001
6,784
1,034
17,059
4,492
3,364
3,713
3,408
23,188
7,067
9,849
4,896
6,862
972
16,073
4,485
3,126
3,646
3,263
23,770
6,376
10,094
5,252
7,193
1,077
17,531
4,579
3,433
3,965
3,456
Total Employment in Market Services
78,248
80,634
85,356
83,427
86,726
* Including temporary employees
Source: Employment and Training Corporation
Contribution to Growth in Private Sector Employment*
Market Services
per cent
Table 3.11
Wholesale and Retail (including Repair of
Motor Vehicles, Motorcycles and Personal
and Household Goods)
Transport and Storage
Accomodation and food service activities
Information and communication
Financial and insurance activities
Real estate activities
Professional, technical and administrative activties
Education
Health and social work
Arts, entertainment and recreation
Other service activties
Total
Dec-2012/
Dec-2011
Dec-2013/
Dec-2012
May-2014/
May-2013
0.4
0.1
0.4
0.4
0.2
0.0
0.9
0.4
0.4
0.0
-0.1
0.5
0.1
0.1
0.4
0.5
0.1
2.7
0.3
0.4
0.6
0.2
0.7
-0.8
0.3
0.4
0.4
0.1
1.7
0.1
0.4
0.4
0.2
3.0
5.9
4.0
* Including temporary employees
Economic Survey November 2014
47
three-year period, from December 2011 to December 2013, employment within
this subsector increased by 684, mainly in light of activity related to residential
care activities and social work activities without accommodation. Meanwhile,
in May 2014, employment in financial and insurance activities increased by
331when compared to the same month in 2013. When comparing December
2013 to December 2011, employment within the subsector increased by 495.
Similar developments were recorded in arts, entertainment, and recreation
services. Between May 2013 and May 2014, employment in this subsector
increased by 319. The major contributors to this growth were gambling and
betting activities. Over the period between December 2011 and December
2013, arts, entertainment, and recreation services recorded an increase in
employment of 510.
Public Sector Employment
During the year to May 2014, as shown in Table 3.12, public sector employment
increased by 1,821, primarily due to an increase of 804 or 2.6 per cent in
employees in Government Departments, mainly in the health and education
sectors. An increase of 760 was recorded in companies with public sector
majority shareholding. This increase is mainly attributable to the temporary
nationalisation of the Maltese public transport system. Independent statutory
bodies recorded an increase in employees of 257. Consequently, total public
sector employment increased from 41,758 in May 2013 to 43,579 in May 2014.
Public Sector Employment*
Table 3.12
Government Departments
Companies with public sector
majority shareholding
Independent Statutory Bodies
of which Temporary Employees
Total
2011
Dec
2012
Dec
2013
Dec
2013
May
2014
May
30,485
30,468
31,788
31,181
31,985
1,981
8,670
1,789
8,753
1,820
8,813
1,842
8,735
2,602
8,992
131
126
104
120
107
41,136
41,010
42,421
41,758
43,579
* Including temporary employees
Source: Employment and Training Corporation
48
Economic Survey November 2014
Table 3.12 shows that, during the year to May 2014, employment in Government
Departments increased by 804 or 2.6 per cent. This mainly reflects increases
in human health and social work activities (438) and activities in education
(130). Nevertheless, by the end of the period under observation, the share
of Government Department employees in total public sector employment
decreased from 74.7 per cent to 73.4 per cent due to developments in other
categories of public sector employment.
During the year to May 2014, employment in companies with public sector
majority shareholding increased by 760. The temporary nationalisation of
the Maltese public transport system was mainly attributed to this temporary
increase. The setting up of the Malta Public Transport Services Ltd contributed
to almost all of this net increase. As a result of these developments, the share
of employees in companies with a public majority shareholding in total public
sector employment increased from 4.4 per cent in May 2013 to 6.0 per cent
in May 2014. Meanwhile, employment in Independent Statutory Bodies
increased to 8,992 in May 2014, reflecting an increase of 257 or 2.9 per cent
when compared to May 2013.
Economic Survey November 2014
49
Box 3.2
Employment in Gozo
A geographical analysis of the gainfully occupied population, including
both the private and the public sector, reveals that the general positive trends
experienced during the year to May 2014 were also reflected in Gozo. As
shown in Table 1, the gainfully occupied population stood at 9,854 at the
end of May 2014, an increase of 600 or 6.5 per cent over May 2013. The
increase in the gainfully occupied population is mostly driven by the private
sector, and mainly reflects increases in education (170), accommodation and
food service activities (92), and wholesale and retail, including repair of
motor vehicles and personal and household goods (56). During the period
December 2011 to December 2012, the gainfully occupied population rose
by 57 or 0.6 per cent to reach 9,149, while during the year to December
2013, the increase amounted to 375 or 4.1 per cent. Since May 2013, total
part-time employment increased by 156 or 3.8 per cent to reach 4,226 by
end of May 2014. This reflects increases in both part-timers holding a fulltime job (83 or 4.2 per cent) and part-time as a primary job (73 or 3.5 per
cent). Additionally, the number of persons registering for employment under
Part I of the Register decreased by 36 to 698 by the end of September 2014.
Gainfully-Occupied Population in Gozo
Table 1
Agriculture, forestry and fishing
Mining and Quarrying
Manufacturing
Electricity, gas, steam and air conditioning supply
Water supply and waste management
Construction
Wholesale and Retail (including Repair of
Motor Vehicles, Motorcycles and Personal
and Household Goods)
Transport and Storage
Accomodation and food service activities
Information and communication
Financial and insurance activities
Real estate activities
Professional, technical and administrative activties
Administrative and support service activities
Public administration and defence;
compulsory social security
Education
Human health and social work activities
Arts, entertainment and recreation
Other service activties
Total
50
2011
Dec
2012
Dec
2013
Dec
2013
May
2014
May
472
48
938
47
174
936
471
45
877
46
161
923
466
43
870
52
158
897
473
40
916
47
160
935
485
35
955
52
148
947
1,297
476
636
173
279
101
225
299
1,322
467
687
174
293
97
258
314
1,314
461
704
205
300
89
278
314
1,235
455
705
179
294
91
264
314
1,291
459
797
216
305
93
291
347
798
1,014
888
166
125
786
1,014
921
169
124
827
1,257
969
182
138
822
1,033
941
223
127
866
1,203
980
231
153
9,092
9,149
9,524
9,254
9,854
Economic Survey November 2014
A Profile of Registered Unemployed under Part 1
The analysis in this section focuses on the registered unemployed under Part
I of the Unemployment Register. Part I of the Register includes those who are
eligible for work and registering with the ETC as jobless. By contrast, Part II
include those who have been dismissed from work due to disciplinary action,
left work of their own free will, refused work or training opportunities or were
struck off the register after an inspection by the Law Enforcement personnel.
This section will analyse the profile of those who are registering as unemployed
under Part I of the Register.
At the end of September 2014, the number of registered unemployed persons
under Part I of the Register stood at 6,120, compared to 7,092 a year earlier.
The decline in the number of unemployed persons was reflected in both the
male and female components. Whilst male unemployment declined by 708
to stand at 4,660, the female component decreased by 264 to stand at 1,460.
Consequently, the share of female unemployment accounted for 23.9 per cent
of total unemployment in September 2014, marginally down by 0.4 percentage
points from 24.3 per cent a year earlier.
The share of persons registering for work for less than 6 months declined from
40.4 per cent to 35.8 per cent, while persons registering for work for more than
2 years increased marginally from 25.2 per cent in September 2013 to 32.7 per
cent as shown in Table 3.13. Meanwhile, the proportion of persons registering for
work between 6 to 12 months and 12 to 24 months declined by 2.6 percentage
points and 0.3 percentage points, to 11.2 and 20.2 per cent, respectively.
Table 3.14 illustrates the age structure of the unemployed. During the year
ending September 2014, the share of youth unemployment, defined as those
falling in the 16-24 age bracket, decreased by 2.9 percentage points, from 15.7
per cent to 12.8 per cent, while the share of those between 25-49 increased by
0.2 percentage points to stand at 52.8 per cent in September 2014. The share
of persons aged 49 or more increased by 2.7 percentage points, to stand at 34.4
per cent as at September 2014.
Data for the registered unemployed classified by occupation as at September
2014 is produced in Table 3.15. The drop in unemployment during the twelve
months to September 2014 is mainly attributable to the decline in the services
and sales workers (514). Notable declines were also registered in plant and
machinery operators and assemblers (297), and clerks and support workers
(245). During the same period, persons registering for professional activities
Economic Survey November 2014
51
Registered Unemployed*
by duration of registration
Table 3.13
Registered
Unemployed
under 6 months
%
6 - 12 months
%
12 - 24 months
%
over 24 months
%
6,952
5,986
5,924
6,291
6,956
7,092
6,120
45.3
45.0
46.6
42.2
38.4
40.4
35.8
15.1
13.0
13.1
14.4
13.3
13.8
11.2
18.8
18.1
16.6
19.3
21.1
20.5
20.2
20.8
23.9
23.7
24.1
27.3
25.2
32.7
2009 (Dec)
2010 (Dec)
2011 (Dec)
2012 (Dec)
2013 (Dec)
2013 (Sep)
2014 (Sep)
*Includes Part I of the Registered Unemployed
Source: Employment and Training Corporation
Registered Unemployed*
by age distribution
Table 3.14
2009 (Dec)
2010 (Dec)
2011 (Dec)
2012 (Dec)
2013 (Dec)
2013 (Sep)
2014 (Sep)
Registered
Unemployed
16 - 24 years
%
25 - 49 years
%
over 49 years
%
6,952
5,986
5,924
6,291
6,956
7,092
6,120
19.5
17.5
17.1
15.8
15.0
15.7
12.8
55.5
54.4
53.4
52.3
52.5
52.6
52.8
25.0
28.1
29.5
32.0
32.5
31.7
34.4
*Includes Part I of the Registered Unemployed
Source: Employment and Training Corporation
52
Economic Survey November 2014
Registered Unemployed Classified by Occupation*
at September 2014
Table 3.15
Registered Unemployed
Males
Females
Total
Elementary Occupations
Plant and machinery
operators and assemblers
Crafts and related trade
workers
Skilled agriculture, fishery
and forestry workers
Services and sales workers
Clerks and support workers
Technicians and Associate
Professionals
Managers
Total
Percentage Share
Males Females
Total
647
77
724
13.9
5.3
11.8
398
68
466
8.5
4.7
7.6
830
27
857
17.8
1.8
14.0
248
698
607
424
593
215
1
325
353
361
164
84
249
1,023
960
785
757
299
5.3
15.0
13.0
9.1
12.7
4.6
0.1
22.3
24.2
24.7
11.2
5.8
4.1
16.7
15.7
12.8
12.4
4.9
4,660
1,460
6,120
100.0
100.0
100.0
*Includes Part I of the Registered Unemployed
Source: Employment and Training Corporation
increased by 252, while persons registering for crafts and related trade services,
and skilled agriculture, fishery and forestry activities, remained approximately
unchanged.
Part-time Activity
As shown in Table 3.16, since December 2011, total part-time employment
increased by 4,890 or 9.3 per cent when compared to December 2013, reflecting
increases in the numbers of both part-timers holding a full-time job and those
holding a part-time job as a primary job. The former increased by 1,444 or
6.4 per cent and the latter rose by 3,446 or 11.6 per cent over the same period.
As shown in Table 3.16, part-time employment based on administrative
data, continued to increase, such that at the end of May 2014, total part-time
employment stood at 59,249, a substantial increase of 3,107 or 5.5 per cent
over twelve months earlier.
At the end of May 2014, the number of part-timers stood at 59,249, of whom
30,779 were males and 28,470 were females. Compared to May 2013, the
number of part-timers holding a full-time job increased by 1,049 or 4.5 per
cent. The gender distribution shows that, both male and female part-timers
Economic Survey November 2014
53
Part-Time Employment
Table 3.16
2011
Dec
2012
Dec
2013
Dec
2013
May
2014
May
Part-Timers holding a full-time job
Males
Females
22,712
15,709
7,003
23,460
15,918
7,542
24,156
16,231
7,925
23,406
15,863
7,543
24,455
16,401
8,054
Part-Timers as a primary job
Males
Females
29,785
12,379
17,406
31,646
13,215
18,431
33,231
13,743
19,488
32,736
13,676
19,060
34,794
14,378
20,416
Total Part-Time Employment
Males
Females
52,497
28,088
24,409
55,106
29,133
25,973
57,387
29,974
27,413
56,142
29,539
26,603
59,249
30,779
28,470
Source: Employment and Training Corporation
holding a full-time job increased, with females registering a higher increase
(511 or 6.8 per cent) than males (538 or 3.4 per cent). Consequently, the share
of females employed as part-timers and also holding a full-time job in total
part-time employment increased.
The number of part-timers holding a part-time job as their primary occupation
increased by 2,058 or 6.3 per cent over the level recorded in May 2013. Females
continue to hold the largest share of persons holding part-time jobs as their
primary occupation. Indeed, this stood at 58.7 per cent at the year ending May
2014, up by 0.5 percentage points when compared to 58.2 per cent in May
2013. During the year to May 2014, the number of females and males with
part-time as their primary job increased by 1,356 and 702 or 7.1 per cent and
5.1 per cent to 20,416 and 14,378, respectively.
54
Economic Survey November 2014
Footnotes:
1
The LFS is a household survey carried out on a quarterly basis by the National Statistics
Office (NSO). The LFS decomposes the working-age population (15-64 year old) into three
independent groups, namely, the employed, unemployed, and inactive. This survey is based on
a random sample of 2,500 private households. Changes in LFS data have to be interpreted with
due caution as minor changes in employment of less than or equal to 1,800 may be the result
of a sampling error.
2
It is noteworthy that the employment reported in the LFS is different from the gainfully-occupied
population as reported by the ETC. Whereas the LFS measures resident persons in employment
(EC: No. 577/98), gainfully-occupied data are based on the administrative records of the ETC
which captures what the employer declares in the Engagement Form upon the commencement
of employment, irrespective of the residential status.
Economic Survey November 2014
55
4. Productive Activities
4. Productive Activities
This Chapter covers Malta's industrial sector including manufacturing, mining
and quarrying, electricity and water supply, and the agriculture and fisheries
sector.
Industrial Turnover
Data in this Chapter is based on a sample of industrial enterprises. However,
one should note that it has to be treated with caution in view of the various
inconsistencies created by the sample, in particular with regards to employment
and turnover.
As can be seen in Table 4.1, total industrial turnover declined by 9.3 per cent in
the first seven months of 2014 when compared to the same period in 2013. The
decline in industrial turnover was mainly brought about by the deterioration of
17.7 per cent in the export market, which outweighed the 16.4 per cent increase
in domestic sales.
During January-July 2014, employment increased slightly by 0.2 per cent at the
expense of hours worked, which decreased by 0.8 per cent when compared to
the same period last year. Wages and salaries increased by 1.5 per cent.
A closer look at the industry components reveals an overall downward trend
in turnover in all the sectors. The mining and quarrying sector experienced a
decline of 2.6 per cent in turnover. During the period under review, employment
in this sector declined by 10.3 per cent. Meanwhile, the number of hours worked
and wages and salaries declined by 6.9 per cent and 6.3 per cent, respectively.
In the first seven months of 2014, turnover of the electricity and water supply
declined by 5.6 per cent, when compared to the same months in 2013. Although
employment declined by 1.0 per cent, the number of hours worked increased
by the same proportion. The wages and salaries in this sector increased by 4.0
per cent.
The manufacturing industry registered a decline of 9.9 per cent in turnover
during the same period, arising from lower exports which were 17.7 per cent
less than the level registered in the previous comparable period a year earlier. At
the same time, domestic sales increased by 27.9 per cent. These growth trends
Economic Survey November 2014
59
are contrary to those observed during the first seven months of 2013, where
domestic sales registered a decrease of 8.5 per cent and export sales grew by
3.6 per cent. During the period under review, employment increased by 0.4 per
cent, while the number of hours worked decreased by 1.0 per cent. Wages and
salaries in the manufacturing industry increased by 1.2 per cent.
During the first two quarters of 2014 gross value added in the agriculture and
fisheries sector declined by 7.0 per cent. A more comprehensive analysis of
this sector is presented towards the end of the chapter.
Manufacturing Performance
The manufacturing industry is the main driver behind industrial turnover. As a
result, the subdued performance in the manufacturing industry was the major
determinant of the decline in industrial turnover. A sectoral analysis of the
major manufacturing sectors is featured in this subsection, while the short-term
activity indicators for the manufacturing industry are presented in Table 4.2.
Computer, Electronic and Optical Products
The turnover of the manufacturing of computer, electronic and optical products
decreased by 23.8 per cent during the first seven months of 2014, when compared
to the same period in 2013. Since this sub-sector is mainly export-oriented, the
decrease in exports by 24.2 per cent has more than outweighed the increase in
domestic sales of 206.0 per cent. It is noteworthy that this sub-sector is largely
affected by international economic developments due to the small number
of relatively large foreign subsidiaries which make up this sub-sector. This
decrease in turnover has led to a decrease in the overall industry turnover of
8.5 percentage points.
During this period, employment decreased by 1.0 per cent, while the number of
hours worked decreased by 2.9 per cent. On the other hand, wages and salaries
increased by 1.7 per cent.
Food Products
Sales of locally manufactured food products are mainly directed towards the
local market. During the first seven months of this year, turnover decreased by
2.5 per cent when compared to the same period in 2013, contributing to a 0.3
percentage points decrease in the total manufacturing industry turnover. This
60
Economic Survey November 2014
resulted mainly in a reduction in both domestic sales and exports of 2.9 per
cent and 0.8 per cent, respectively.
Employment in this sector remained relatively stable, with a marginal decrease
of 0.1 per cent, when compared to the same period in the previous year. Wages
and salaries increased by 3.2 per cent, while the number of hours worked
decreased by 3.0 per cent.
Basic Pharmaceutical Products
Manufacture of basic pharmaceutical products was negatively affected by the
reduction in export sales. The turnover for this sector decreased by 20.6 per cent
due to a decrease of 20.7 per cent in exports. Meanwhile, local sales decreased
by 0.8 per cent. The lower turnover of this sub-sector contributed to an overall
1.7 percentage points decrease in total manufacturing industry turnover.
During the first seven months of 2014, the employment level in this sector
decreased by 8.8 per cent, while the number of hours worked decreased by 5.9
per cent. Wages and salaries decreased by 8.1 per cent.
Other Manufacturing
The other manufacturing sub-sector is composed of businesses engaged in the
manufacture of toys, games and jewellery items, and is mostly export-oriented.
During the period January-July 2014, the turnover of this sub-sector decreased
by 1.7 per cent due to a decrease in sales in both the domestic and foreign
markets. In particular, domestic sales decreased by 0.5 per cent, while exports
decreased by 0.3 per cent. This contributed to a 0.1 percentage points decrease
to the overall manufacturing industrial turnover.
Despite the decrease in turnover, employment increased by 6.0 per cent during
this period. In addition, the number of hours worked increased by 0.6 per cent,
while wages and salaries grew by 0.7 per cent.
Printing and Reproduction of Recorded Media
The printing and reproduction of recorded media industry is mostly exportoriented. This sub-sector has experienced a decline in both domestic and
overseas markets, with decreases of 14.7 per cent and 20.0 per cent, respectively.
Overall this resulted in a decrease in turnover of 17.9 per cent during the
Economic Survey November 2014
61
first seven months of 2014 when compared to the same period last year. This
resulted in the sector contributing negatively by 0.9 percentage points to the
manufacturing industry total turnover.
Consequently, the employment level decreased by 12.1 per cent. At the same
time, the number of hours worked and wages and salaries also decreased, by
4.8 per cent and 2.5 per cent, respectively.
Motor Vehicles, Trailers and Semi-Trailers
During the first seven months of 2014, the manufacture of motor vehicles,
trailers and semi-trailers maintained the positive trend in turnover experienced
during recent years. In the period January-July 2014, turnover for this subsector increased by 10.2 per cent over the same period in 2013. This was the
result of an increase in exports of 11.0 per cent which outweighed the 13.0 per
cent decrease in domestic sales. The resulting effect on the total manufacturing
industry turnover was an increase of 0.4 percentage points.
Wages and salaries increased by 10.1 per cent during the period under review.
Employment and the number of hours worked also increased, by 4.1 per cent
and 5.4 per cent, respectively.
Other Non-Metallic Products
During the January-July 2014 period, the turnover of the manufacturing of other
non-metallic products increased by 13.7 per cent. This increase was brought
about by an increase in both the domestic and foreign markets, with increases of
13.2 per cent and 26.2 per cent, respectively. This sector contributed positively
by 0.6 percentage points to the total industry turnover.
Notwithstanding the increase in turnover, employment decreased by 3.5 per
cent, the number of hours worked decreased by 5.4 per cent and wages and
salaries in this sector declined by 4.2 per cent.
Electrical Equipment
The turnover of the manufacturing of electrical equipment decreased by 48.4
per cent during the first seven months of 2014, when compared to the same
period last year. This was mainly the result of lower exports, which decreased
by 50.0 per cent. Meanwhile, domestic sales increased by 26.8 per cent during
this period. These developments resulted in an overall negative contribution of
62
Economic Survey November 2014
2.0 percentage points in the total manufacturing industry turnover.
Despite the decrease in turnover, wages and salaries increased by 11.5 per cent
in this sub-sector. During the same period, employment decreased by 2.3 per
cent, while the number of hours worked registered a decline of 5.6 per cent.
Box 4.1
The Industrial Production Index
The Industrial Production Index is a measure of economic activity. Developments
in this index can be used to describe the economic cycles of industry. The index
monitors the changes in production in leading products taken from a sample of
industrial enterprises and is compiled using 2010 as a base year. The number
of companies surveyed add up to around 180 and cover over 95.0 per cent of
total industrial production. Data on physical quantities are collected from 50.0
per cent of these enterprises whilst 30.0 per cent are estimated according to the
number of hours worked and the remaining 20.0 per cent have their turnover
deflated by use of the Industrial Producer Prices.
In 2013, the overall industrial production index sustained a negative performance
and decreased by 4.7 per cent. In the first seven months of 2014, the overall
industrial production index decreased by 6.5 per cent. This was due to decreases
in the production index of all components of the industry. These decreases
were particularly more pronounced in the mining and quarrying sector and the
manufacturing sector.
During the first seven months of 2014, the manufacturing sector’s production
index decreased by 7.4 per cent. It is to be noted that the production index
decreased by 3.9 per cent during the same months in 2013. The decrease in the
manufacturing sector’s production index in 2014 can be largely explained by
the double digit decrease in the basic pharmaceutical products (46.1 per cent),
computer, electronic and optical products (22.9 per cent), leather and related
products (21.2 per cent) and in the machinery and equipment sector (12.4 per
cent). The effect of these decreases was to some extent mitigated by double digit
increases in other sectors, including fabricated metal products (19.6 per cent),
furniture (15.2 per cent), food products (11.5 per cent) and the motor vehicles,
trailers and semi-trailers sector (11.0 per cent).
Economic Survey November 2014
63
Indicators of Industrial Activity
(2010=100)
Table 4.1
% of growth indices
2011
2012
2013
TOTAL INDUSTRY
Turnover
Domestic
Exports
0.7
7.2
-0.6
6.4
6.8
6.7
-2.0
-5.1
-3.1
2.5
-5.5
3.6
-9.3
16.4
-17.7
Employment
Hours Worked
Wages and salaries
-0.1
0.6
2.8
-0.9
-0.8
2.7
-1.4
-0.8
1.5
-1.2
-0.4
1.3
0.2
-0.8
1.5
MINING AND QUARRYING
Turnover
Domestic
Exports
13.0
13.0
-
-7.8
-7.8
-
5.9
5.9
-
-3.1
-3.1
-
-2.6
-2.6
-
Employment
Hours Worked
Wages and salaries
-3.6
-7.0
-3.2
-8.2
-7.9
-6.4
-5.3
-7.3
-6.6
-6.1
-9.8
-7.7
-10.3
-6.9
-6.3
MANUFACTURING TOTAL
Turnover
Domestic
Exports
0.8
11.1
-0.6
6.3
6.6
6.7
-2.1
-7.1
-3.1
2.8
-8.5
3.6
-9.9
27.9
-17.7
0.1
1.0
2.7
-0.2
0.2
3.0
-1.3
-0.4
1.8
-1.0
0.2
1.8
0.4
-1.0
1.2
ELECTRICITY AND WATER SUPPLY
Turnover
Domestic
Exports
-0.4
-0.4
-
7.8
7.8
-
-1.1
-1.1
-
0.7
0.7
-
-5.6
-5.6
-
Employment
Hours Worked
Wages and salaries
1.4
-1.3
3.8
-6.6
-7.6
1.0
-1.6
-3.5
-0.2
-2.3
-5.2
-1.4
-1.0
1.0
4.0
Employment
Hours Worked
Wages and salaries
2013
2014
Jan-July Jan-July
Source: National Statistics Office
64
Economic Survey November 2014
Short-term Activity Indicators for Manufacturing
(2010=100)
Table 4.2
% of growth indices
SECTORAL MANUFACTURING
INDICES
2011
2012
2013
2013
Jan-July
2014
Jan-July
MANUFACTURE OF FOOD
PRODUCTS
Turnover
Domestic
Exports
-2.1
-0.3
-0.8
8.7
6.7
16.1
6.1
4.0
14.1
8.3
7.9
9.6
-2.5
-2.9
-0.8
Employment
Hours Worked
Wages and salaries
-2.2
-0.3
-3.0
3.7
2.2
6.1
-1.6
3.5
5.7
-1.6
3.6
5.5
-0.1
-3.0
3.2
MANUFACTURE OF BEVERAGES
Turnover
Domestic
Exports
2.6
2.0
21.8
4.2
5.7
-33.7
6.6
6.4
20.2
5.9
5.2
47.4
5.3
5.3
9.3
Employment
Hours Worked
Wages and salaries
-1.6
-1.3
0.6
0.5
2.5
1.5
-3.6
0.6
3.8
-6.3
1.2
2.4
3.0
0.4
4.9
15.8
-14.7
16.4
-5.7
2.7
-5.8
-25.9
7.5
-26.3
-18.4
-2.2
-18.6
-29.8
73.4
-31.4
4.8
5.2
35.5
0.6
1.7
18.2
-8.9
-11.5
-17.7
-7.0
-6.4
-13.5
-6.5
-14.9
-18.6
-53.4
-24.1
-64.2
2.3
3.6
1.8
7.7
23.5
2.1
7.3
19.1
3.2
-33.3
-29.1
-35.2
-9.9
-7.2
3.5
-2.6
3.1
8.0
5.0
8.3
3.5
4.0
9.5
1.9
18.2
4.9
10.8
MANUFACTURE OF TEXTILES
Turnover
Domestic
Exports
Employment
Hours Worked
Wages and salaries
MANUFACTURE OF WEARING
APPAREL
Turnover
Domestic
Exports
Employment
Hours Worked
Wages and salaries
Economic Survey November 2014
65
Short-term Activity Indicators for Manufacturing
(2010=100)
Table 4.2
2011
2012
2013
2013
Jan-July
2014
Jan-July
MANUFACTURE OF LEATHER
AND RELATED PRODUCTS
Turnover
Domestic
Exports
-7.6
-53.8
8.4
-3.2
-31.8
-0.2
9.8
-2.9
10.7
31.4
-2.9
33.8
-8.1
64.3
-14.6
Employment
Hours Worked
Wages and salaries
-32.1
-35.3
-29.4
-9.4
-6.2
-0.5
-6.3
-5.4
-7.6
-4.5
-3.2
-2.2
-17.2
-16.5
-10.5
MANUFACTURE OF WOOD
AND WOOD PRODUCTS
Turnover
Domestic
Exports
-13.4
-3.4
-80.3
5.5
0.9
147.5
-1.3
-0.6
-10.0
3.3
4.6
-9.6
-36.4
-38.6
-14.4
0.7
3.0
6.2
-0.3
-1.7
0.4
0.9
3.0
3.1
-1.3
0.2
-0.6
5.3
4.6
6.1
MANUFACTURE OF PAPER
AND PAPER PRODUCTS
Turnover
Domestic
Exports
12.8
12.8
0.0
5.8
5.8
0.0
-2.3
-2.3
0.0
-1.3
-1.3
0.0
-9.5
-9.5
0.0
Employment
Hours Worked
Wages and salaries
-2.7
-1.4
-1.0
-1.7
-6.9
-2.8
0.5
2.5
-2.1
2.5
3.0
-0.5
-1.3
-5.0
-8.8
PRINTING AND REPRODUCTION
OF RECORDED MEDIA
Turnover
Domestic
Exports
25.5
25.6
21.3
2.2
2.6
0.8
-0.8
-34.5
12.5
6.6
-22.3
16.1
-17.9
-14.7
-20.0
0.4
5.7
3.8
-2.2
-0.3
4.6
-21.0
-24.8
-16.8
-17.1
-22.5
-16.0
-12.1
-4.8
-2.5
Employment
Hours Worked
Wages and salaries
Employment
Hours Worked
Wages and salaries
66
continued
Economic Survey November 2014
Short-term Activity Indicators for Manufacturing
(2010=100)
Table 4.2
continued
2011
2012
2013
2013
Jan-July
2014
Jan-July
MANUFACTURE OF CHEMICALS
AND CHEMICAL PRODUCTS
Turnover
Domestic
Exports
7.5
8.8
-6.0
20.5
12.0
74.4
30.6
3.5
141.7
34.6
12.1
134.3
-26.5
-14.1
-43.8
Employment
Hours Worked
Wages and salaries
-0.1
-3.6
5.3
0.1
-0.1
3.3
8.1
7.1
9.2
8.6
8.8
9.0
0.7
-0.3
3.4
MANUFACTURE OF BASIC
PHARMACEUTICAL PRODUCTS
Turnover
Domestic
Exports
-0.8
23.7
-0.9
9.5
21.6
9.5
-0.3
-16.4
-0.3
-0.1
-20.1
-0.1
-20.6
-0.8
-20.7
Employment
Hours Worked
Wages and salaries
9.1
4.4
15.5
7.5
9.9
9.3
2.4
-4.7
2.7
5.4
-2.6
2.9
-8.8
-5.9
-8.1
MANUFACTURE OF RUBBER
AND PLASTIC PRODUCTS
Turnover
Domestic
Exports
12.3
25.9
8.9
10.6
36.8
-0.4
7.0
11.9
3.5
5.9
15.4
0.2
4.4
14.3
0.8
Employment
Hours Worked
Wages and salaries
10.5
13.1
7.9
9.1
10.4
7.8
11.8
15.0
15.6
15.9
19.4
16.8
7.1
4.9
4.4
Turnover
Domestic
Exports
-4.8
-6.9
3.8
2.9
4.8
-18.6
-2.5
-1.0
-23.7
-2.9
-0.6
-32.5
13.7
13.2
26.2
Employment
Hours Worked
Wages and salaries
-7.5
-7.7
-3.5
-0.6
-1.6
0.4
-0.9
0.1
1.5
0.1
1.9
2.6
-3.5
-5.4
-4.2
MANUFACTURE OF OTHER
NON-METALLIC PRODUCTS
Economic Survey November 2014
67
Short-term Activity Indicators for Manufacturing
(2010=100)
Table 4.2
2011
2012
2013
2013
Jan-July
2014
Jan-July
MANUFACTURE OF FABRICATED
METAL PRODUCTS
Turnover
Domestic
Exports
-3.3
-1.6
-10.7
-9.0
-8.2
-16.3
-0.3
-1.3
12.4
-11.5
-14.4
19.1
80.3
97.8
-40.2
Employment
Hours Worked
Wages and salaries
-10.4
-12.2
0.1
-6.6
-10.8
-9.7
-12.8
-14.3
-6.3
-14.7
-16.8
-11.6
-1.2
2.5
5.6
MANUFACTURE OF COMPUTER,
ELECTRONIC
AND OPTICAL PRODUCTS
Turnover
Domestic
Exports
1.1
250.0
0.5
3.5
-23.9
4.0
-18.0
-86.3
-17.9
-7.4
-93.3
-7.1
-23.8
206.0
-24.2
4.3
4.3
-1.5
-4.7
-1.1
-2.5
-1.6
1.4
2.0
-2.9
3.4
2.7
-1.0
-2.9
1.7
-62.0
-17.5
-64.6
84.3
-9.7
99.5
46.3
-15.0
50.8
59.9
-17.4
63.9
-48.4
26.8
-50.0
Employment
Hours Worked
Wages and salaries
-1.4
-4.0
-4.3
-3.4
-0.4
-0.4
-2.2
-6.0
2.3
-2.3
-6.5
0.7
-2.3
-5.6
11.5
MANUFACTURE OF MACHINERY
AND EQUIPMENT N.E.C.
Turnover
Domestic
Exports
24.2
27.0
18.2
-1.3
2.3
-4.1
-5.1
-14.5
2.7
-8.4
-17.9
-0.8
-16.1
-18.0
-12.5
Employment
Hours Worked
Wages and salaries
19.4
17.9
20.1
-1.4
-7.3
-0.2
4.9
8.6
12.5
1.9
5.7
11.4
5.5
-0.0
-2.8
Employment
Hours Worked
Wages and salaries
MANUFACTURE OF ELECTRICAL
EQUIPMENT
Turnover
Domestic
Exports
68
continued
Economic Survey November 2014
Short-term Activity Indicators for Manufacturing
(2010=100)
Table 4.2
continued
2011
2012
2013
2013
Jan-July
2014
Jan-July
MANUFACTURE OF MOTOR
VECHICLES,
TRAILERS AND SEMI-TRAILERS
Turnover
Domestic
Exports
4.4
16.4
3.7
12.2
7.1
12.4
24.9
3.6
25.6
26.4
15.1
26.8
10.2
-13.0
11.0
Employment
Hours Worked
Wages and salaries
12.4
14.8
10.2
-1.0
-1.2
5.5
5.5
8.6
8.6
5.1
10.3
8.0
4.1
5.4
10.1
MANUFACTURE OF OTHER
TRANSPORT EQUIPMENT
Turnover
Domestic
Exports
13.8
13.8
-
9.9
9.9
-
-3.0
-3.0
-
-8.5
-8.5
-
-35.4
-35.4
-
Employment
Hours Worked
Wages and salaries
5.2
18.4
11.2
-2.0
-13.2
3.5
3.8
18.1
23.6
5.2
42.4
16.3
2.9
-3.3
27.2
MANUFACTURE OF FURNITURE
Turnover
Domestic
Exports
-16.4
-11.9
0.0
-2.0
-2.0
0.0
8.8
8.8
0.0
12.5
12.5
0.0
27.7
27.7
0.0
Employment
Hours Worked
Wages and salaries
-12.4
-16.1
-16.8
-2.8
-6.8
-5.7
1.7
1.2
2.3
1.8
-0.7
3.2
-0.7
-4.2
-4.6
18.4
10.2
15.0
2.6
-2.8
3.3
9.4
11.2
10.0
11.8
9.6
12.3
-1.7
-0.5
-0.3
6.0
5.5
6.5
-1.4
-0.7
4.7
-0.1
-1.7
3.2
0.1
-2.7
3.9
6.0
0.6
0.7
OTHER MANUFACTURING
Turnover
Domestic
Exports
Employment
Hours Worked
Wages and salaries
Economic Survey November 2014
69
Short-term Activity Indicators for Manufacturing
(2010=100)
Table 4.2
REPAIR AND INSTALLATION OF
MACHINERY AND EQUIPMENT
Turnover
Domestic
Exports
Employment
Hours Worked
Wages and salaries
continued
2011
2012
2013
2013
Jan-July
2014
Jan-July
9.5
36.3
-15.0
14.6
68.5
9.6
3.6
-2.7
8.0
-8.3
-38.3
-3.4
16.8
120.7
0.9
-6.1
-9.1
-7.5
-3.6
-1.9
1.1
-2.2
-2.7
-0.1
-3.3
-4.2
0.1
1.9
3.4
7.8
Source: National Statistics Office
Agriculture and Fisheries
The value of the agriculture and fisheries sector stems from the important
environmental impact this sector has in view of the utilisation of important
natural resources. Notwithstanding its relatively small contribution to the
Maltese economy, this sector ensures the availability of fresh regional produce to
the local population, while also contributing to tourism and to the local heritage.
A decrease of 7.0 per cent in the gross value added from the agriculture
and fisheries sector was recorded during the first six months of 2014 when
compared to the same period a year earlier. Consequently, this resulted in a
lower contribution by the agriculture and fisheries sector in relation to the total
gross value added, which decreased from 1.6 per cent in the first six months of
2013 to 1.4 per cent during the same period in 2014. The sector’s contribution
to total gross value added was also slightly lower than that registered on average
during the period 2010-2013, which averaged 1.6 per cent.
Agriculture
The total volume of slaughtered beef, pork and broilers increased by 2.8 per
cent to 7,466 tonnes during the first eight months of 2014, when compared to
the same period in 2013. This can be attributed mainly to a 7.2 per cent increase
in the volume of slaughtered pork, which is on a rising trend following the
70
Economic Survey November 2014
closure of a number of farms during 2011. As can be seen in Table 4.3, in the
period under review, the volume of slaughtered beef increased by 2.2 per cent,
while the slaughtering of broilers declined by 3.1 per cent.
The amount of fresh fruit and vegetables sold on organised markets during the
first eight months of 2014 was 31,586 tonnes, which is in line with the sales in
the same period in 2013. However, the composition of the sold fresh fruit and
vegetables has slightly changed, with an increase of 12.3 per cent in the volume
of fresh fruit sold and a decrease of 0.7 per cent in sales of fresh vegetables.
The increase in the volume of fresh fruit can be mainly attributed to increases
in the sales of strawberries and sweet oranges.
Between January and August 2014, the wholesale value of agricultural products
sold through organised markets fell by 10.1 per cent, to €13.1 million, when
compared to the same period in 2013. This resulted from a 12.2 per cent fall
in the wholesale value of fresh vegetables, which was partly compensated by
an increase of 0.8 per cent in the value of fresh fruit. The decline in wholesale
value of fresh vegetables was mainly due to a decline in value for dry onions,
potatoes, vegetable marrows and watermelons.
During the same period, as shown in Table 4.4, the total value of imports of
Agricultural Indicators
Table 4.3
Slaughtering (tonnes)
Beef
Pork
Broilers
2013
Jan-Aug
2014
Jan-Aug
759
3,758
2,746
775
4,028
2,662
2010=100
Fresh Fruit
Price Index
Volume Index
134.9
95.0
112.9
106.7
Fresh Vegetables
Price Index
Volume Index
97.8
108.9
86.8
108.1
Source: National Statistics Office
Economic Survey November 2014
71
Imports of Major Agricultural Commodities
Table 4.4
Live Animals
Meat and Edible Offals
Fish
Dairy Produce
Edible Fruits and Nuts
Cereals
Preparations of Meat, Fish
Sugar & Confectionery
Cereal Prep.
Veg. and Fruit Prep.
Misc. Edible Prep.
Beverages, Spirits, Vinegar
Feeds
Total
€ million
2011
2012
2013
2013
Jan-Aug
2014
Jan-Aug
0.3
49.9
24.4
41.6
31.3
27.8
36.8
23.4
53.6
22.2
33.1
47.1
31.3
0.3
50.1
57.3
43.4
30.4
50.3
42.1
23.8
53.7
25.4
34.1
53.5
34.7
0.3
49.6
53.7
44.4
33.6
44.3
42.7
23.8
57.8
26.4
33.5
55.8
35.1
0.2
32.0
39.2
28.4
21.4
30.9
29.3
16.3
36.5
18.1
23.5
37.6
21.5
0.1
32.4
36.2
29.2
20.7
17.3
31.5
12.8
35.3
17.5
25.4
39.1
21.1
422.8
499.1
501.0
334.9
318.6
Note: Totals may not add up due to rounding.
Source: National Statistics Office
major agricultural commodities declined by 4.9 per cent to €318.6 million. The
major contributors to this decline were cereals, which decreased by 44.0 per
cent, equivalent to €13.6 million and sugar & confectionery, which decreased
by 21.5 per cent, equivalent to €3.5 million.
Fisheries
Notwithstanding its small size, the Maltese fisheries sector provides an
important contribution to the environment and the social-economic aspect of
the country. The fisheries sector mainly utilises traditional fishing methods and
fish farming aquaculture methods. Traditional fishing techniques mainly provide
for dolphinfish (lampuki), blue fin tuna and swordfish for the local community.
Aquaculture fish farming, on the other hand, caters mostly for the export sector.
During the period January-August 2014, the price and volume indices of fresh
fish changed only marginally when compared to the same period of 2013. An
increase of 0.2 per cent was registered in the volume index of fresh fish, while
the price index fell by 1.5 per cent. This reflects a total of 571 tonnes of fresh
fish landings with a total value of €3.8 million recorded during the first eight
months of 2014.
72
Economic Survey November 2014
Box 4.2
Economic Accounts for Agriculture 2013
Agricultural production in Malta is mainly composed of livestock products,
crop products, animal products and secondary activities, which include
the production of wine and cheese. This productive sector faces a number
of challenges mainly arising from the size of the country and the limited
availability of agricultural land, which makes it difficult to exploit the benefits
of economies of scale. The scarcity in agricultural water supply and the
fragmented land ownership arising from traditional inheritance patterns are
also amongst the challenges faced by this sector in Malta.
The final production of the agricultural sector at basic prices increased by 3.3
per cent in 2013, when compared to 2012. This increase in production was
mainly attributable to an increase in livestock products of 5.8 per cent which
together with increases registered in animal products (4.2 per cent) and crop
production (1.9 per cent) more than outweighed a decline of 4.6 per cent in
secondary activities, which includes the production of wine and cheese, during
the same period. Overall, final total production has increased nominally by
around €4.3 million in the period under review.
Table 1 indicates that final production at basic prices has grown each year since
2010, with the largest growth rate being registered between 2012 and 2013.
During 2010-2013, the composition of individual agricultural activities as a
proportion of the final agricultural production did not follow a particular trend.
However, on average, the share of crop products as a proportion of total final
Final Production at Basic Prices by Type of Product
at Current Market Prices
Table 1
€ thousand
2010
Final production at basic prices
Livestock products
Animal products
Crop products
Secondary activities
2011
2012
2013
126,134 127,421 127,962 132,213
45,256 44,172 43,001 45,492
24,083 24,201 28,168 29,343
49,803 52,299 49,323 50,250
6,992
6,749
7,470
7,128
Source: National Statistics Office
Economic Survey November 2014
73
Box 4.2 cont.
production stood at 39.3 per cent, while the share of livestock products and
animal products was 34.6 per cent and 20.6 per cent, respectively. Secondary
activities contributed the least to final production, with an average of 5.5 per
cent, during the four years under review.
As illustrated in Table 2, intermediate consumption at purchase prices has overall
declined by 2.5 per cent in 2013, when compared to 2012. This can be mainly
attributed to the continued decline in all components of the various services,
as well as a decline in animal feed which in total declined by 4.4 per cent and
2.0 per cent, respectively. The highest contributor to the decline registered in
the various services category was the other agricultural services component. A
decline of 3.6 per cent in energy and lubricants, which was mainly caused by a
decline in other fuels and propellants, was also experienced, nevertheless, due
to its small share, its negative contribution to total intermediate consumption
was low. On the other hand, the cropping category increased by 1.6 per cent,
mainly due to increases in the fertilisers and soil improvers component.
Factor income at current market prices for the agricultural sector increased
by 7.1 per cent in 2013, mainly due to the 3.4 per cent increase in total final
production at producer prices and the 2.5 per cent decrease in intermediate
consumption. As a result of the continued phasing out of the Special Market
Factor Income at Current Prices
Table 2
€ thousand
2010
2011
2012
2013
Total final production at producer prices
add subsidies on production
121,877 125,185 126,265 130,526
4,258
2,236
1,697
1,687
Total final production at basic prices
less intermediate consumption
126,135 127,421 127,962 132,213
67,680 71,055 70,902 69,123
Gross value added at basic prices
less fixed capital consumption
58,455
6,745
56,365
6,967
57,060
6,891
63,091
7,647
Net value added at basic prices
add other subsidies not directly linked
with production
51,710
49,398
50,169
55,444
24,807
17,319
18,212
17,816
Factor income at current prices
76,518
66,717
68,381
73,260
Source: National Statistics Office
74
Economic Survey November 2014
Box 4.2 cont.
Policy Programme for Maltese Agriculture (SMPPMA), subsidies on production
have declined by 0.6 per cent. Other subsidies which are not directly linked
with production also registered a decrease.
Table 3 illustrates the distribution of factor income at current prices. The
increase of 7.1 per cent in factor income was mainly earned by entrepreneurs,
who experienced an increase in entrepreneurial income of 8.1 per cent in 2013.
It is noteworthy that the largest share of factor income was derived from profits,
which were on average around 92.0 per cent of the total factor income, followed
by wages with an average share of 5.7 per cent. In 2013, compensation of
employees and rents decreased by 5.5 per cent and 2.4 per cent, respectively.
On the other hand, interest increased by 11.2 per cent.
Table 4 illustrates the annual producer price indices related to agricultural
products for the period 2010-2013. Changes in prices of fruit, vegetables,
animals and animal products are represented in the output index, while changes
in the prices of raw materials and services utilized by the agricultural sector are
represented by the input price index. The narrower the gap between the input
costs and the value of outputs, the greater the compression experienced in the
profitability gap of the agricultural sector. Such dynamics are explained by the
relative rate of change between the two price indices.
The output price index and the input price index increased by 1.2 per cent and
1.0 per cent, respectively in 2013, when compared to 2012. The main driver
behind the increase in the output price index was a broad-based increase in the
sub-categories mainly led by increases registered in animals, animal products
and potatoes and which more than outweighed the decline registered in the price
Distribution of Factor Income
(at Current Prices)
Table 3
Factor Income
Entrepreneurial income (profits)
Compensation of employees (wages)
Interest
Rents
€ thousand
2010
2011
2012
2013
76,517
70,426
4,606
1,028
457
66,717
60,741
4,616
841
519
68,380
62,680
4,457
762
481
73,260
67,731
4,212
848
469
Source: National Statistics Office
Economic Survey November 2014
75
Box 4.2 cont.
Annual producer price indices for agricultural products
(2010 = 100)
Table 4
Weight
2010
2011
2012
2013
100.0
100.0
103.2
113.2
114.6
Forage
3.4
100.0
111.8
113.9
115.5
Potatoes
4.6
100.0
89.8
114.6
128.1
26.3
100.0
100.9
116.0
103.1
4.7
100.0
84.5
90.6
99.5
Animals
39.2
100.0
102.6
108.4
114.6
Animal products
21.8
100.0
112.4
122.8
128.7
100.0
100.0
109.4
114.8
115.9
80.3
100.0
111.0
116.3
117.8
4.5
100.0
99.8
101.0
99.8
10.3
2.3
1.1
100.0
100.0
100.0
118.1
101.8
55.5
124.0
105.2
55.5
124.2
111.2
55.8
Veterinary expenses
1.7
100.0
107.1
102.4
103.5
Animal feeding stuffs
37.6
100.0
119.5
128.4
130.3
Maintenance of materials
8.4
100.0
101.6
102.5
107.0
Maintenance of buildings
Other goods and services
2.9
11.5
100.0
100.0
103.1
97.6
107.3
98.4
110.5
97.8
19.7
100.0
103.2
108.7
108.1
Output index at producer prices
Fresh vegetables
Fruit
Input total
Goods and services currently consumed
in agriculture
Seeds and planting stock
Energy; lubricants
Fertilisers and soil improvers
Plant protection products and pesticides
Goods and services contributing to
agricultural investment
Source: National Statistics Office
of fresh vegetables. The increase in the price of inputs can be mainly attributed
to the increase in the price of fertilisers and soil improvers and maintenance
of materials which increased by 5.7 per cent and 4.4 per cent, respectively, in
the period under review. These increases more than outweighed the marginal
declines registered in the price of other goods and services and the price of
seeds and planting stock, as well as a decline in the price index for goods and
services contributing to agricultural investment.
76
Economic Survey November 2014
5. Services Activities
5. Services Activities
This Chapter presents developments within Malta’s services sector, with a
particular focus on the domestic tourism industry. As well as analysing the
developments within the tourism sector, some of the regulatory, development
and investment promotion activities within the services sector, will also be
reviewed.
Tourism
In the first eight months of 2014, tourist activity has continued to prosper, with
inbound tourism increasing by 8.4 per cent, over the previous corresponding
period as total incoming tourists rose from 1,067,204 to 1,157,238. An increase
was recorded in the majority of salient tourism indicators over last year,
including, the nights spent by inbound tourists, which increased by 4.9 per cent
as well as the expenditure from inbound tourism, which rose by 6.5 per cent.
Average full-time employment in the accommodation and food service activities
recorded an increase, albeit less pronounced, of 0.7 per cent during the year to
May 2014. With regards to the cruise passenger industry, arrivals that exclude
the embarkations and the Maltese cruise passenger arrivals, increased by 2.7 per
Main Tourism Indicators
Table 5.1
2011
Inbound Tourists
2012
2013
2013
2014
Jan-Aug
Jan-Aug
1,157,238
1,415,018
1,443,414
1,582,153
1,067,204
Nights spent (000’s)
11,241
11,860
12,890
8,835
9,264
Cruise Passengers*
493,172
555,680
424,566
305,083(1)
313,174(1)
9,612
9,800
9,909
9,894(2)
9,962(2)
Average full-time employment in
accommodation and food services activities**
*Excluding embarkations and Maltese cruise passengers.
**The data presented is based on the distribution of the administrative records of the ETC of the gainfully occupied population according to the
standard NACE classification of economic activities.
(1)
Data for January-September.
(2)
Data shows average for January-May.
Source: National Statistics Office, Employment and Training Corporation
Economic Survey November 2014
79
cent between January to September of this year over the corresponding period
of 2013. This positive outcome in the tourism industry reflects the collaboration
between the Government, the Malta Tourism Authority (MTA) and the other
involved stakeholders which continued to enhance accessibility to Malta as well
as ensure adequate seat capacity and stress product development. Table 5.1 and
Appendix Table VI present a selection of tourism indicators.
Monthly Distribution
Inbound tourists recorded a positive result throughout the first eight months
of 2014. Arrivals during the first half of 2014, reached a significant level of
724,755, an 8.7 per cent increase over the previous corresponding period. A
glance at the monthly figures which are presented in Table 5.2, and illustrated
in Chart 5.1, reveals that August remained the peak month of inbound tourism
during the period under review, accounting for 20.3 per cent of the inbound
tourists, followed by July with a share of 17.1 per cent. With Easter falling in
April, there was also a significant increase of 11.3 per cent in tourist arrivals
in April of this year over April 2013.
Table 5.3 shows the quarterly distribution of tourist departures for the period
January to December 2010 to 2013. When compared to 2012, in 2013, the
share of inbound tourists declined in the first and third quarters and increased
in the second and fourth quarters. Such a pattern suggests a lower element of
Chart 5.1
Inbound Tourists
Thousand
250
200
Total
150
100
50
0
UK
Aug-08
80
Aug-09
Aug-10
Aug-11
Aug-12
Aug-13
Aug-14
Economic Survey November 2014
Monthly Inbound Tourists
Table 5.2
January
February
2011
2012
2013
2014
64,092
61,353
64,887
69,525
65,661
61,788
61,442
65,299
March
100,203
80,142
89,286
97,800
April
120,817
122,979
133,173
148,188
May
130,355
133,648
155,366
166,497
June
138,733
147,361
162,879
177,446
July
162,994
174,805
181,899
197,389
August
191,570
199,430
218,271
235,094
January/August
974,424
981,505
1,067,204
1,157,238
0.7
8.7
8.4
% change
September
153,989
163,251
176,370
October
147,886
151,794
173,306
November
83,817
85,491
99,928
December
54,902
61,373
65,345
1,415,018
1,443,414
1,582,153
2.0
9.6
Total
% change
Source: National Statistics Office
Economic Survey November 2014
81
Quarterly Distribution of Inbound Tourists
Table 5.3
per cent
2010
2011
2012
2013
Q1
13.8
16.3
14.1
13.6
Q2
27.4
27.6
28.0
28.5
Q3
37.8
35.9
37.2
36.4
Q4
21.0
20.3
20.7
21.4
Source: National Statistics Office
seasonality in tourism in Malta in 2013, with a reduction in the troughs and
peaks when compared to the previous years.
Tourist Nationality
Chart 5.2 illustrates the relative market share of Malta’s main source markets
over January to December 1990 to 2013. The UK remained the major market in
the Maltese tourism sector, notwithstanding the fact that its share has declined
from 51.6 per cent in 1990 to 28.7 per cent in 2013. The German market
increased its share between 1990 and 2000 but then registered a drop in its
market share to 9.3 per cent in 2013. By contrast, the share of the Italian market
fluctuated from 7.3 per cent in 1990 to 14.8 per cent in 2013. Meanwhile, the
share of the French market increased to 6.5 per cent in 1995 and subsequently
increased to 7.4 per cent in 2013. The share of the ‘other’ markets category
increased from 22.2 per cent in 1990 to 39.8 per cent in 2013.
As indicated in Table 5.4, which provides a detailed breakdown of tourist
departures by nationality, during the first eight months of 2014, marked
additions were registered in almost all of the tourist markets. The largest
absolute increases stemmed from the UK market with an increase of 23,577
tourists constituting more than a quarter of the overall increase, followed by
that of the Italian market with an increase of 20,199 tourists. Notable increases
were recorded in departures originating from Libya, mainly resulting from the
political developments which caused significant increases of Libyan arrivals
in Malta, in the months of July and August. Tourist arrivals from France, the
82
Economic Survey November 2014
Chart 5.2
Tourist Market Shares*
per cent
January-December
60
50
40
30
20
10
0
UK
Germany
Italy
1990
France
2000
1995
Others
2013
*As from 2001 tourism data is based on the Inbound Tourism Survey, and therefore is not strictly comparable to previous
periods. Until March 2004, data for sea arrivals was taken from embarkation cards. Thereafter, data for sea departures was
taken from the Inbound Tourism Survey.
Inbound Tourists by Nationality
Table 5.4
2011
2012
2013
2013
2014
Jan-Aug
Jan-Aug
327,705
United Kingdom
438,783
441,275
454,659
304,128
Germany
134,306
137,500
147,110
93,342
88,246
Italy
201,774
202,200
233,777
163,756
183,955
France
103,629
107,893
116,533
83,991
91,867
Spain
63,088
60,223
53,278
40,050
29,819
Netherlands
38,897
39,191
41,486
29,504
31,705
Scandinavia*
93,783
97,363
105,068
70,416
76,605
6,273
17,217
34,621
19,975
27,517
31,742
27,279
28,948
20,251
22,386
Libya
Belgium
Austria
19,647
19,827
25,739
18,225
18,786
Switzerland
25,046
25,758
28,702
18,505
20,584
USA
16,499
18,027
19,502
13,381
15,115
Others
241,552
249,661
292,728
191,681
222,948
TOTAL
1,415,018
1,443,414
1,582,153
1,067,204
1,157,238
*Includes Denmark, Finland, Norway, and Sweden.
Source: National Statistics Office
Economic Survey November 2014
83
Scandinavian countries, Netherlands, Belgium and Switzerland also increased
considerably whereas the Spanish and the German market recorded declines
of 10,231 and 5,096 arrivals, respectively.
Cruise Passengers
The contractionary trend in cruise passenger arrivals recorded in 2013 was
reversed in the first three quarters of 2014, with the number of cruise passengers
(excluding embarkations and Maltese cruise passengers) increasing from
305,083 arrivals to 313,174 arrivals. From January to September of this year,
there were 203 cruise liner calls an increase of 9 calls over the corresponding
2013 level. Furthermore, during the same period, the French market was
the main source market of the arrivals with an absolute increase of 15,512
passengers, followed by the German market with an increase of 9,769 arrivals.
It is noteworthy that 21,183 passengers of the total cruise passengers spent a
night at a hotel in Malta, in comparison to 7,156 passengers in the same period
of 2013.
Accommodation
Table 5.5 provides data on accommodation capacity by category of units and
beds for the period ending August 2014. It is to be noted that the MTA licensing
department has reclassified all collective accommodation establishments which
were registered as aparthotels to hotels. This was due to the publication of Legal
Notice 351 of 2012 ‘Tourism Accommodation Establishment Regulations’,
which conformed Malta’s classification of hotels to the criteria issued by the
EU. These changes were taken on board as from January 2013. As a result of
these changes, the ‘tourist village’ category was added to the ‘Guesthouses’
category whereas previously it was added to the ‘Aparthotels’ category.
As illustrated in Table 5.5, by the end of August 2014, the number of hotels
increased by 16 units over the December 2013 level, reflecting increases in
the number of 4-Star, 3-Star and 2-Star hotels. In terms of hotel bed-stock
capacity, this resulted in an increase of 5,730 beds or 17.5 per cent. During
the same period, the total number of guesthouses and hostels increased by 4
units and the number of beds in this category rose by 93 beds or 3.1 per cent.
Another important indicator in the analysis of the tourism industry is the
occupancy rate for various types of accommodation. As shown in Table 5.6,
from January to August 2014, all the accommodation categories except for the
2-Star category, reached their peak inflow in August. During August, the 5-Star
hotel accommodation category recorded the highest occupancy rate of 98 per
cent followed by that of the 4-Star hotel with 91.0 per cent occupancy rate.
84
Economic Survey November 2014
Main Types of Tourist Accommodation
Table 5.5
2012 (Dec)
2013 (Dec)
2014 (Aug)
Establishments Bed-Places Establishments Bed-Places Establishments Bed-Places
Hotels
5-Star
15
6,909
15
6,904
15
7,256
4-Star
37
14,995
38
13,759
45
18,038
3-Star
33
7,870
43
10,684
49
11,593
2-Star
7
519
13
1,372
16
1,562
92
30,293
109
32,719
125
38,449
1,337
Total
Other N.E.C.*
Guesthouses
13
390
22
1,310
24
Aparthotels
19
3,885
-
-
-
-
7
1,293
15
1,654
17
1,720
39
5,568
37
2,964
41
3,057
Hostels
Other N.E.C. Total
* The Malta Tourism Authority (MTA) licensing department reclassified all collective accommodation establishments registered as
aparthotels to hotels (refer to Legal Notice 351, 2012). These changes were taken on board from January 2013. The ‘tourist village’
category was added to the ‘Guesthouses. category from January 2013, whereas previously it was added to the ‘Aparthotels’ category.
Source: National Statistics Office
Over the period January to August 2014, the 4-Star hotel category recorded
the highest average occupancy rate of 72.0 per cent from that of 67.0 per cent
in the same 2013 period. This result was followed by that of the 5-Star hotel,
which increased to 69.0 per cent, from an average occupancy rate of 65.0 per
cent in the corresponding period of 2013.
The average length of stay by tourists is another important indicator of the
performance of the tourism industry. Between January and August 2014, the
average length of stay declined marginally to 8 nights. This marginal decline
may be attributable to the fact that during the period under review, business
travellers, who on average tend to spend fewer nights than leisure visitors,
accounted for a significant proportion of the increase in arrivals.
Economic Survey November 2014
85
Monthly Accommodation Occupancy Rates*
Table 5.6
per cent
Hotels
Hostels &
Guesthouses1
5-Star
4-Star
3-Star
2-Star
65
67
57
47
44
January
34
41
31
29
25
February
43
54
36
36
25
March
48
61
43
43
32
April
72
72
54
50
43
2013
Average (Jan-Aug)
2014
May
76
73
61
51
44
June
82
79
65
52
49
July
91
89
82
66
61
August
98
91
84
64
62
Average (Jan-Aug)
69
72
58
50
43
* Net Occupancy levels for Collective Accommodation Establishments based on the ACCOMSTAT Census
1
The Malta Tourism Authority (MTA) licensing department reclassified all collective accommodation establishments
registered as aparthotels to hotels (refer to Legal Notice 351, 2012). These changes were taken on board from
January 2013.
Source: National Statistics Office
Employment
During the period of January to May of 2013, employment in the accommodation
and food service activities increased from an average of 9,894 persons between
January and May 2013 to an average of 9,962 persons, hence exhibiting an
increase of 68 jobs. As a share of the gainfully occupied population, employment
in this sector declined marginally by 0.2 percentage points, to 6.2 per cent.
Similarly, as a share of the total private gainfully occupied population, the
private sector employment in the accommodation and food service activities
declined marginally by 0.2 percentage points, to 8.5 per cent.
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Economic Survey November 2014
Tourism Earnings
The source of the data presented in this section is the Tourstat survey used by the
National Statistics Office (NSO) and is therefore not comparable with previous
issues of the Economic Survey, where the data source for expenditure was the
Balance of Payments, also used by the NSO. During January to August 2014,
total spending reached €1,050.6 million, up by 6.5 per cent in annual terms, as
shown in Table 5.7 and Chart 5.3. This year-on-year increase in expenditure
was mainly the result of a 9.0 per cent increase in non-package spending which
in turn reflected increases in both fares and accommodation, with the latter
registering a higher rise of 14.8 per cent, than the former with an increase of
around 4.0 per cent. Tourists’ expenditure on package holidays increased by
4.2 per cent during the period under review, while expenditure on the ‘other’
component of tourist expenditure increased by 6.8 per cent. In per capita terms,
tourist expenditure decreased by 1.8 per cent to €907.8 while expenditure per
nights spent increased to €113.4 from January toAugust 2014 from €111.7 in
the corresponding 2013 period.
Expenditure from Inbound Tourism*
Table 5.7
Total
Expenditure
(€ million)
Per Capita
Expenditure
(€)
Expenditure Per
Nights Spent
(€)
2011
1,221.3
863.1
108.6
2012
1,326.5
919.0
111.8
2013
1,440.4
910.4
111.7
2013 (Jan-Aug)
986.5
924.4
111.7
2014 (Jan-Aug)
1,050.6
907.8
113.4
*This table is not comparable with the same table in previous issues of the Economic
Survey since as from this Survey, the source of data is the Tourstat Survey.
Source: National Statistics Office
Economic Survey November 2014
87
Chart 5.3
Expenditure from Inbound Tourism
Euro million
2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
2009
2010
2011
2012
2013
2013
2014
Jan - Aug
Regulatory Activity
This section focuses on the developments within the regulatory authorities in
the services industry in Malta during the period January to September 2014, in
particular, the Malta Financial Services Authority (MFSA) and the Lotteries and
Gaming Authority (LGA). The MFSA is the single regulator and supervisory
authority for the financial services activities in Malta, while the LGA is Malta’s
regulatory agency for online gaming.
Malta Financial Services Authority
During the period January to September 2014, the MFSA has continued to take
an active part in the European System of Financial Supervisors (ESFS) and
in the three European Supervisory Authorities, which include the European
Securities and Markets Authority (ESMA), the European Banking Authority
(EBA), the European Insurance and Occupational Pensions Authority (EIOPA),
along with the European Systemic Risk Board (ESRB). The MFSA has also
been involved in on-going work related to the establishment of the Banking
Union, in particular the Single Supervisory Mechanism conferring banking
supervisory powers to the European Central Bank (ECB), and the proposed
Single Resolution Mechanism, which jointly contribute to enhance financial
stability.
With the aim of addressing its macro-prudential supervisory role, the MFSA
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Economic Survey November 2014
issued a revised version of Rule 01 of 2012 on Foreign Currency Lending.
Through these changes, new provisions that reflect guidelines issued by the EBA
on capital measures for foreign currency lending to unhedged borrowers under
the Supervisory Review and Evaluation Process (SREP),could be incorporated.
The MFSA has also worked on the implementation of ESRB Recommendation
on Funding of Credit Institutions.
Additional legislative developments were undertaken by the MFSA during the
period under review. On 28 March 2014, two Legal Notices concerning the
Investment Services Act (Legal Notice 105 of 2004 and Legal Notice 106 of
2014) were published. Moreover, on 25 April 2014, the Trusts and Trustees
(Amendment) Act made amendments with the objective of enhancing Malta’s
status as a trustee jurisdiction. Furthermore, the MFSA has been involved in
EU development work on the Capital Requirements Directive IV, Solvency
II, the Insurance Mediation Directive, and the Directive on Institutions for
Occupational Retirement Provision (IORP) Directive.
Between January and September 2014, the MFSA formalised the implementation
of the National Private Placement Regime (NPPR) in Malta. This regime
allows Alternative Investment Fund Managers (AIFMs) to market Alternative
Investment Funds (AIFs) in the instances where these cannot be marketed, in
terms of the passporting regimes outlined in Articles 31 to 33 of the Alternative
Investment Fund Managers Directive (AIFMD). The MFSA has also signed a
Memorandum of Understanding (MoU) with the Financial Intelligence Analysis
Unit (FIAU), with the objective of further preventing money laundering and
funding of terrorism.
During the same period, a significant number of new licences were issued by
the Authority. Financial institutions were issued 4 new licenses, increasing
the total to 33. In total, 18 investment services licences were issued, leading
to 137 licences by the end of September 2014. The number of recognised
fund administrators increased by a unit to 28 administrations. The MFSA also
issued 88 new Collective Investment Scheme (CIS) licences, increasing the
total number of CIS licences to 1,074, as at the end of September 2014. With
regards to insurance companies, 2 new licenses were issued, bringing the total
to 59 insurance companies. Moreover, trustees increased by 4, to an aggregate
of 143 trustees.
In the first nine months of 2014, 3,597 companies and partnerships were
registered with the Registry of Companies. With regards to retirement schemes,
3 schemes and 2 administrators were licensed, increasing the total retirement
Economic Survey November 2014
89
schemes to 35 and administrators to 14. Furthermore during the same period,
licenses to 4 asset managers were issued, increasing the total of asset managers
to 10.
Lotteries and Gaming Authority
Malta’s Lotteries and Gaming Authority (LGA) is an independent regulatory
body established under The Lotteries and Other Games Act, Chapter 438 of
the Laws of Malta. The LGA is responsible for the regulation of all forms of
gaming in Malta (online and land based), including those of casinos, amusement
machines, gaming devices, distance communication games (remote gaming),
commercial bingo halls, national lottery and other lotteries, sports betting, and
non-profit games.
During the first nine months of 2014, the total number of licenses increased by
27.0 per cent, whereby class 1 licenses increased from 155 in the corresponding
2013 period to 218, class 2 licenses increased from 83 to 94, class 3 licenses
increased from 61 to 67, while class 4 licenses increased from 44 to 56 licenses.
During the same period under review, the total number of companies in this
sector increased from 232 to 276. There were 640 permits for 1,544 tombola
sessions and 32 permits for small lotteries. In all, the LGA regulates more than
400 licenses spread within a portfolio of 265 international companies.
Moreover, looking at the legal and regulatory developments that took place
during this year in this sector, the LGA initiated a number of consultations
with the industry in order to identify and address a number of key priority areas
warranting special focus. Furthermore, the LGA has also published a number
of policy updates aimed at reducing bureaucracy and simplifying compliance
for both land based and remote based activities. A set of amendments to the
Gaming Devices Regulations were introduced by means of Legal Notice 85
of 2014 with the aim of make the gaming devices market more attractive and
competitive by further protecting players, increasing players’ winnings, and
alleviating the problems faced by licensees. Through Legal Notice 12 of 2014,
the LGA has launched the Responsible Gaming Fund Regulations with the
aim of organising and funding projects that are directed to the rehabilitation
of gamers and encouraging activities alternative to gaming. Other initiatives
that were undertaken include the educational campaigns about responsible
gaming, and directing funds for the support of individuals affected by gaming
related problems.
Furthermore, the LGA has actively participated at EU level at expert groups
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Economic Survey November 2014
related to gambling services and consumer protection as well as match fixing.
Besides, the LGA has contributed towards the drafting of the 4th Anti-Money
Laundering Directive. It has also continued to participate in the negotiations
which led to the finalisation of the drafting of the Council of Europe Convention
against the Manipulation of Sports Competitions, which ended in January 2014.
In addition, the LGA has introduced regulatory statements that attest the probity
and compliance aspects of its licensees’ operations in order to, assist them when
applying in other markets and to facilitate their application process. By the end
of September 2014, 31 regulatory statements were issued in favour of licensees.
Development and Investment Promotion
Malta Enterprise (ME), which is the national economic development agency,
is empowered and regulated by the Malta Enterprise Act and the Business
Promotion Act. ME’s core business is the promotion of direct investment, both
local and foreign, with the key objectives of, promoting exports, research and
development and innovation (R&D&I), industrial clusters, and an ongoing
relationship between education and industry. While the Malta Industrial
Parks Ltd. (MIPL), which works closely to ME, administers and maintains a
substantial portfolio of industrial spaces including over 500 factories in various
industrial estates as well as the Safi Aviation Services Park.
Between January and September 2014, the Corporation approved 106 projects,
of which 71 were carried out by locally-owned companies and 35 by foreign
owned companies. Approved projects were related to activities in a number of
sectors including, pharmaceuticals, manufacturing, digital game development,
energy and environment, as well as electronics, printing and the provision of
specialised services. These projects benefited from, working space and industrial
premises as well as incentives and support measures intended to facilitate new
productive investment and expansions. In fact, during this period, ME has
reviewed and approved Investment Aid Tax Credits based on eligible investment
for a total value of €46.5 million in favour of 187 beneficiaries.
ME continued to offer support aimed primarily at small to medium sized
enterprises (SMEs), whereby during January-September 2014, ME processed
around €7.0 million in fiscal aid for SMEs, in order to help them improve the
quality of their operations, services and products.
ME also offered fiscal incentives through schemes such as Get Qualified and
MicroInvest. Indeed in the first nine months of 2014, the Corporation approved
551 applications under the Get Qualified Scheme, to a value of €3.0 million
Economic Survey November 2014
91
in tax credits while around 890 enterprises benefited from the MicroInvest
Scheme with a total tax credit value of €6.2 million for a declared investment
of €16.9 million. Through the Enterprise Europe Network (EEN), 15 cross
border partnership agreements were signed in 2014.
With respect to business incubation, 2 new start-up companies started their
pre-incubation program at the Kordin Business Incubation Centre (KBIC)
such that as at end of September 2014, occupancy at KBIC stood at 75.0 per
cent. Furthermore, in March 2014, a MoU was signed with MCAST, whereby
a number of units within KBIC were dedicated to students seeking to set up
their own business. As a result, by June 2014, 4 such projects were approved.
During the period under review, MIPL concluded the organisational review
it undertook and restructured its finances. MIPL managed to facilitate the
expansion projects and job creation for existing companies as well as for a
number of SMEs, with an allocation of a total of 27 factories and 14 sites for
the development of factories and workshops. This amounted to more than
100,000 sqm of industrial space.
In the administration of the European Regional Development Funds (ERDF),
MIPL continued with the project for the embellishment of 4 industrial estates
and the construction of 3 new child care centres with a total project cost of
€16.0 million. In addition, ME continued to be actively engaged in promoting
the Life Sciences Park internationally, whereby the first tenants will start
operating by not later than the first quarter of 2015. Furthermore, in view of
the fact that Malta is emerging as an important destination in the production
of digital games, ME has continued its work on the Digital Hub. Work on this
project is reaching its final stages of completion, with the target completion
date of the first quarter of 2015.
ME continued to promote Gozo’s economic development. During the period
under review, in collaboration with the Ministry for Gozo, several commitments
were agreed including a feasibility study that will be carried out on the laying
of a fibre optic cable between Malta and Gozo. ME is also focusing on setting
up a world class medical and rehabilitation hub in Gozo within the framework
of a medical tourism perspective with the aim of promoting FDI in the field
of advanced education and training. ME is also committed to facilitating the
provision of infrastructure without which the development of a digital hub in
Gozo would not be possible.
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Economic Survey November 2014
6. Prices and Incomes
6. Prices and Incomes
This Chapter provides an analysis of domestic price movements during the
twelve months to September 2014, together with a comparison of Malta’s
inflation rate to that of other EU Member States. Furthermore, it also includes
an analysis of the developments in average sectoral wages, on the basis of
collective agreements of a representative sample of companies deposited within
the Department of Industrial and Employment Relations.
The Harmonised Index for Consumer Prices (HICP) rate published by Eurostat
provides the official measure of consumer price inflation in the Eurozone
for the purposes of monetary policy in the Euro Area and assessing inflation
convergence as required under the Maastricht criteria. Malta’s monthly yearon-year harmonised inflation rate (HICP) as reported by Eurostat continued
to show lower levels when compared to previous years. In fact, it increased
gradually from 0.6 per cent in September 2013 to 1.6 per cent in February 2014
and decreased again to 0.6 per cent in September 2014. The 12-month moving
average inflation rate stood at 0.8 per cent in September of this year down from
1.6 per cent in September 2013.
The overall average weekly wage increased by €4.50 or 1.6 per cent. The highest
weekly wage increase of 1.9 per cent was registered in the Transport and the
Community and Business sub-sectors. Meanwhile, the highest percentage share
of employees (35.3 per cent) earned a weekly wage within the range of €233.40
and €283.39 while around 19.1 per cent of all employees in the sample earned
an average weekly wage of more than €333.40.
Inflation
International Comparison
Table 6.1 presents data on the inflation rates for European Union (EU) Members
States as at September 2014. The inflation rate is based on the HICP, which
enables direct comparability among Member States. In addition, Chart 6.1 shows
domestic inflationary trends in the 12-month moving average and annual HICP.
Inflationary developments in the EU in September 2014 show that Romania
registered the highest annual rate of inflation at 1.8 per cent, followed by Finland
at 1.5 per cent, Austria at 1.4 per cent, United Kingdom and Latvia both at 1.2
per cent. On the other hand, eight countries recorded negative inflation with the
Economic Survey November 2014
95
Harmonised Index of Consumer Prices (September 2014)
Table 6.1
per cent
Member States
Annual Rate
12-Month Moving
Average
Austria
Belgium
Bulgaria
Cyprus
Croatia
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
United Kingdom
1.4
0.2
-1.4
0.2
0.0
0.8
0.3
0.2
1.5
0.4
0.8
-1.1
-0.5
0.5
-0.1
1.2
0.0
0.3
0.2
-0.2
0.0
1.8
-0.1
-0.1
-0.3
0.0
1.2
1.6
0.8
-1.4
0.3
-0.4
0.6
0.4
1.0
1.4
0.7
1.0
-1.5
0.3
0.3
0.4
0.5
0.3
1.0
0.6
0.4
-0.1
1.3
0.0
0.6
0.0
0.2
1.8
EU 28
Euro Area
0.4
0.3
0.7
0.6
Malta
0.6
0.8
Source: Eurostat, National Statistics Office
96
Economic Survey November 2014
Chart 6.1
Harmonised Index of Consumer Prices
per cent
5
4
3
2
1
0
-1
Sep-09
Sep-10
Sep-11
12-month moving average
Sep-12
Sep-13
Sep-14
Annual
lowest rate being that of Bulgaria at -1.4 per cent. This was followed by that
of Greece at -1.1 per cent, Hungary at -0.5 per cent and Spain at -0.3 per cent.
In addition, there were four countries that showed no change in their annual
rate of inflation. These were Croatia, Lithuania, Portugal and Sweden. The
average inflation rate for the EU28 Member States was 0.4 per cent, down from
1.3 per cent in September 2013. Declines in EU28 inflation during this period
were noticed in prices related to Communications (-2.3 per cent), Food and
Non-Alcoholic Beverages (-0.4 per cent) and Transport (-0.2 per cent) while
prices related to Education (3.1 per cent), Alcoholic Beverages, Tobacco and
Narcotics (2.8 per cent) and Restaurants and Hotels (1.7 per cent) sub-sectors
recorded the highest increases.
The annual rate of inflation in Malta in September 2014 stood at 0.6 per cent,
unchanged from the same level as previous year. Domestic annual inflation in
September 2014 was driven by developments in prices for Alcoholic Beverages,
Tobacco and Narcotics (6.1 per cent), Education (6.0 per cent) and Clothing and
Footwear (4.3 per cent). Price drops were mainly driven by the Housing, Water,
Electricity, Gas and other fuels sub-index with an annual decline of 8.1 per cent.
Other sub-indices that showed negative annual rates during the same month
were Communications (-1.4 per cent), Furnishings, Household Equipment and
Routine Household Maintenance (-0.5 per cent) and Food and Non-Alcoholic
Beverages (-0.4 per cent). Table 6.2 illustrates the monthly annual rate of HICP
for the period January 2011 and September 2014.
Economic Survey November 2014
97
Harmonised Index of Consumer Prices
Annual rate of change (y-o-y)
Table 6.2
per cent
2011
2012
2013
2014
3.3
2.7
2.8
2.4
2.5
3.1
2.4
2.5
2.8
2.5
1.7
1.5
1.7
2.6
2.6
3.8
3.7
4.4
4.2
3.2
2.9
3.2
3.6
2.8
2.4
1.8
1.4
0.9
0.8
0.6
0.9
0.7
0.6
0.5
0.3
1.0
0.9
1.6
1.4
0.5
0.4
0.7
0.6
0.8
0.6
January
February
March
April
May
June
July
August
September
October
November
December
Source: National Statistics Office
In light of the developments in the annual rate of inflation, the 12-month moving
average for Malta in September 2014 stood at 0.8 per cent, slightly above the
rate for EU28 which stood at 0.7 per cent.
Retail Price Index and COLA
The Cost of Living Adjustment agreement (COLA) is based on the 12-month
moving average measure of the Retail Price Index (RPI). The RPI index has a
different weighting structure when compared to the HICP index. This measure
is calculated by comparing the average RPI in the 12-months leading to the
month under consideration with the corresponding average in the previous
12-month period.
Malta’s RPI 12-month moving average inflation rate in September 2014
stood at 0.3 per cent. Fluctuations at sub-index level provide insight on the
underlying contributors to domestic inflation. Indeed, as Table 6.3 illustrates,
the highest increase in September 2014 is noted in the Beverages and tobacco
sector followed by the Recreation and culture, Household equipment and house
98
Economic Survey November 2014
Index by Commodity Group
(Average for 12 months)
Table 6.3
Commodity Group
Food
Beverages and Tobacco
Clothing and Footwear
Housing
Water, Electricity, Gas and Fuels
Household Equipment & House Maintenance Costs
Transport and Communications
Personal Care and Health
Recreation and Culture
Other Goods and Services
December 2009=100
per cent
Sep-12
Sep-13
Sep-14
4.34
4.15
-2.97
1.72
1.17
1.75
2.06
1.12
0.84
5.03
5.77
3.94
0.47
1.16
0.17
1.34
-0.85
2.12
2.19
1.54
0.66
4.91
0.13
0.58
-9.36
1.99
-1.46
1.45
2.87
-0.01
Source: National Statistics Office
maintenance costs and Personal care and health sub-indices. Table 6.4 shows
the 12-month moving average of the RPI overall inflation rate.
In September 2014, the Food sub-index 12-month moving average recorded a
relatively minor change compared to the change in September 2013. Indeed,
prices increased by 0.66 per cent compared to 5.77 per cent in 2013. The
contribution to the overall inflation rate stood at 0.14 percentage points, mainly
reflecting developments in served meals and food, take-aways, chocolate,
poultry, rabbit, beef and pork meat, fresh bread and fresh pastry. Negative
contributions were mainly noticed with respect to vegetables and fish prices.
The 12-month moving average rate for the Beverages and Tobacco sub-index,
increased from 3.94 per cent in September 2013 to 4.91 per cent during the same
month in 2014, with a resulting contribution of 0.30 percentage points to the
headline inflation rate. The principal contributors to inflationary developments
for this sub-index were mainly related to cigarettes prices. This accounted for
more than half of the overall contribution of this sub-index to headline inflation.
In September 2014, the Clothing and Footwear sub-index continued to show
marginal average changes. Indeed, it recorded a 12-month average increase of
0.13 per cent from 0.47 per cent registered in the comparable period in 2013.
Economic Survey November 2014
99
Retail Price Index
(12-Month Moving Average Inflation Rate)
Table 6.4
January
February
March
April
May
June
July
August
September
October
November
December
per cent
2011
2012
2013
2014
1.65
1.79
1.99
2.10
2.25
2.41
2.50
2.64
2.73
2.82
2.82
2.72
2.65
2.67
2.61
2.63
2.51
2.42
2.36
2.28
2.30
2.30
2.36
2.42
2.46
2.40
2.40
2.30
2.31
2.26
2.25
2.19
2.01
1.76
1.52
1.38
1.23
1.17
1.10
0.99
0.80
0.66
0.48
0.35
0.30
Source: National Statistics Office
The contribution to headline inflation stood at 0.01 percentage point. These
minor developments mainly emanated from mens' footwear and underwear
while negative contributions were attributed to women and girls' outwear.
The Housing sub-index registered an increase of 0.58 per cent in September
2014, thus contributing 0.04 percentage points to the overall 12-month moving
inflation rate. This rate of inflation was lower than the 1.16 per cent recorded
during the previous 12-month period. The contribution under this sub-index is
mainly attributed to various construction works.
In September 2014, the Water, Electricity, Gas and Fuels sub-index showed
a significant decrease of 9.36 per cent contrasting with the 0.17 per cent
increase recorded in September 2013. This mainly reflected the decrease in
water and electricity tariffs announced earlier this year. In September 2014, the
contribution of this sub-index to headline inflation stood at -0.31 percentage
points.
The 12-month moving average rate for the Household Equipment and House
Maintenance Costs sub-index, increased by 1.99 per cent recorded in September
2014, up from 1.34 per cent in September 2013. The contribution of this subindex to the overall rate stood at 0.13 percentage points mainly underpinned
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Economic Survey November 2014
by developments in furniture and household appliances. On the other hand,
marginal negative contributions to inflationary developments were reported in
carpets and glassware sub-categories.
In September 2014, the 12-month moving average inflation rate for the Transport
and Communications sub-index stood at a negative rate of 1.46 per cent. The
overall contribution to headline inflation of this sub-index was also negative
at 0.33 percentage points and this emanated from developments pertaining to
air transport services, fuels and telephone services.
In September 2014, the 12-month moving average rate for the Personal Care and
Health sub-index was 1.45 per cent with a contribution of 0.12 percentage points
to the RPI inflation rate. The change was lower than the 2.12 per cent increase
recorded in the previous comparable period of 2013. Major developments were
recorded in hygienic articles and medical services.
The 12-month moving average growth rate in the Recreation and Culture subindex recorded an increase of 2.87 per cent in September 2014, compared to a
2.19 per cent growth rate recorded during the comparable month of 2013. In
September 2014, the contribution to the overall rate was that of 0.27 percentage
points with the main contributions to the rise in inflation were books and
newspapers and education expenses. Meanwhile, audio visual equipment
contributed negatively to headline inflation.
The 12-month average inflation rate, of the Other Goods and Services sub-index
declined from 1.54 per cent to - 0.01 per cent. This was mainly attributed to
changes observed in jewellery, watches and clocks. On the other hand, positive
contributions were registered in items like travel articles, domestic help and
other personal effects. In line with these developments, the overall contribution
of this sub-index to the headline inflation rate was negligible.
Sectoral Wages
On the basis of collective agreements deposited within the Department of
Industrial and Employment Relations, this section analyses changes and
developments in sectoral average weekly wage rates recorded between
September 2013 and September 2014.
The sample under review is made up of 189 firms employing 25,839 employees,
where 69 firms are engaged in direct production and employ 10,960 employees
Economic Survey November 2014
101
while the remaining 120 firms operate in market services with 14,879
employees. The data for weekly wages is divided into four major employment
categories namely labourers, skilled tradesmen, clerical and managerial grades.
It is to be noted that definite contracts of employment are not considered in
this analysis. The data also excludes employment benefits over and above the
basic wage, such as production bonuses, overtime payments, social security
and allowances, and other non-wage income. This source of non-wage income
can be quite significant for some categories of employment, hence it follows
that the employees’ actual average weekly remuneration might be higher than
that reported in this analysis.
Since the information in this Chapter is based on a sample of collective
agreements and includes only the basic weekly wage, the results shown in the
following tables cannot be directly compared to data based on the gainfully
occupied population included in other Chapters of this Economic Survey.
Consequently, the tables and data presented in this Chapter are also not
directly comparable to those published in previous Economic Surveys. Direct
comparability is hampered by the methodology and sampling procedure adopted,
mainly the inclusion of additional firms and exclusion of others. This means that
the weighting of individual firms in each category would change according to
the changes in employment levels. The reported average wage rates may also
change either when a new collective agreement results in a reclassification of
grades or when new trainees are paid the entry level wage.
The methodology used in this analysis groups collective agreements on the basis
of economic activity. The average of the minimum and maximum wage scales
for each individual collective agreement is then calculated. This gives the subsectoral mean wage. In cases where the collective agreement excludes the cost
of living increases, the figures are then adjusted accordingly. The COLA for
the year 2014 as announced during the last budget speech amounted to €3.49.
Table 6.5 shows the average weekly wage rate for the various employment
categories in the sampled firms as at September 2013. The overall weighted
average wage of all firms stood at €290.28 per week, reflecting a weighted
average wage for those employed in direct production and market services of
€267.62 and €306.96 respectively. This implies a sectoral wage gap of €39.34
per week. The highest average weekly wage rates were recorded in the Paper
& Printing sub-sector (€334.17), Community & Business sub-sector (€324.44)
and the Communications sub-sector (€313.04). On the other hand, the lowest
paid sub-sectors were the Machinery (€216.06), Textiles, Footwear & Clothing
sub-sector (€223.06) and the Non-Metallic Products sub-sector (€229.19). The
lowest weekly average wage rate in September 2013 amounted to €188.79 and
102
Economic Survey November 2014
Average Weekly Wages - September 2013
Table 6.5
€
Labourer
Skilled
Clerical/
Tradesman Executive
Managerial
Weighted
Average
Oil Drilling
Food
Beverages
Textiles, Footwear and Clothing
Furniture & Fixtures
Paper & Printing
Chemicals
Non-Metallic Products
Metal Products
Machinery
Electrical Machinery
Transport Equipment
Miscellaneous
Electricity & Gas Services
Wholesale & Retail Trade
Banking & OFI
Transport
Storage and Warehousing
Communications
Community & Business
Recreation Services
Hotels & Catering Ests
220.22
229.38
252.11
216.48
247.74
298.38
254.64
204.99
261.04
188.79
209.00
232.86
286.38
240.89
225.97
265.37
228.98
226.11
271.00
247.61
214.89
230.61
275.38
296.20
309.24
243.38
281.15
360.12
301.14
250.41
267.77
223.98
271.57
261.20
348.15
273.35
253.06
290.29
283.07
263.12
295.90
305.16
242.65
252.35
282.56
242.67
260.61
212.67
307.50
304.48
207.32
234.94
257.36
291.86
269.32
284.57
277.75
278.80
253.07
261.84
247.08
224.78
243.98
437.63
393.72
332.64
222.86
302.71
343.97
339.21
259.14
285.69
250.64
312.83
287.81
331.56
420.73
311.69
479.97
638.95
302.15
483.24
410.58
287.68
259.05
272.08
269.67
279.66
223.06
276.80
334.17
276.17
229.19
254.93
216.06
238.80
260.20
308.99
273.54
256.30
298.41
297.13
256.91
313.04
324.44
230.29
241.71
All Firms
237.56
292.10
265.51
407.26
290.28
Direct Production
Market Services
236.35
240.89
292.76
291.06
267.55
265.27
341.01
425.63
267.62
306.96
Compiled from data provided by the Department of Industrial and Employment Relations and Employment and Training
Corporation
was earned by labourers in the Machinery sub-sector while the highest weekly
average wage rate was earned by the Transport managerial grade (€638.95).
Table 6.6 shows the average weekly wage rates for the various employment
categories in the sampled firms as at September 2014. The fact that both Table
6.5 and Table 6.6 use the same employment weighting structure and the same
sample of firms makes them directly comparable. Thus, the differences in the
corresponding wage rates represent the actual change in wages occurring during
Economic Survey November 2014
103
Average Weekly Wages - September 2014
Table 6.6
€
Labourer
Skilled
Clerical/ Managerial Weighted
Tradesman Executive
Average
Oil Drilling
Food
Beverages
Textiles, Footwear and Clothing
Furniture & Fixtures
Paper & Printing
Chemicals
Non-Metallic Products
Metal Products
Machinery
Electrical Machinery
Transport Equipment
Miscellaneous
Electricity & Gas Services
Wholesale & Retail Trade
Banking & OFI
Transport
Storage and Warehousing
Communications
Community & Business
Recreation Services
Hotels & Catering Ests
223.71
232.87
255.88
219.97
251.23
302.10
258.40
208.48
264.61
192.28
212.63
236.35
289.87
244.38
229.46
268.86
236.42
229.60
274.49
252.47
218.38
234.10
278.87
299.69
313.01
246.87
284.64
365.73
304.67
253.90
271.46
227.47
275.31
264.69
351.64
276.84
256.55
293.78
286.80
266.61
299.39
310.14
246.14
255.84
286.05
246.16
264.25
216.16
311.29
307.97
210.81
239.54
260.85
295.35
272.81
288.06
281.24
282.58
256.56
265.33
253.27
228.27
247.47
441.12
397.21
336.65
226.35
306.20
347.60
342.70
262.63
289.86
254.13
316.76
291.30
335.05
424.22
315.18
483.46
657.83
305.64
490.59
417.72
291.17
262.54
275.57
273.16
283.44
226.55
280.29
338.80
279.84
232.68
258.45
219.55
242.52
263.69
312.48
277.03
259.79
301.90
302.81
260.40
317.27
330.68
233.78
245.20
All Firms
241.49
296.11
269.80
413.59
294.78
Direct Production
Market Services
239.96
245.70
296.68
295.22
271.25
269.63
344.68
432.69
271.35
312.04
Compiled from data provided by the Department of Industrial and Employment Relations and Employment and
Training Corporation
the period under observation.
The weighted average weekly wage for all firms as at September 2014 stood
at €294.78. The best performing sub-sector as at September 2014 remained
unchanged from that of September 2013, namely Paper & Printing sub-sector
which had a weekly average weighted remuneration of €338.80. This was
followed by the Community & Business sub-sector, registering an average
wage of €330.68. As in the case of the previous year, the least remunerated
sub-sectors in the sample were the Machinery sub-sector (€219.55), the Textiles,
104
Economic Survey November 2014
Footwear and Clothing sub-sector (€226.55) and the Non-Metallic Products
sub-sector (€232.68). The lowest reported wage was recorded for the labourer
grade under the Machinery sub-sector (€192.28), which was €26.60 or 16.1 per
cent over the National Minimum Wage for 2014 which stood at €165.68. The
highest average wage remained that of the managerial grade in the Transport
sub-sector at €657.83, while other relatively high wages were those for the
managerial grade in the Communications sub-sector (€490.59) and the Banking
& OFI sub-sector (€483.46).
Changes in Average Weekly Wages
September 2014 - September 2013
Table 6.7
per cent
Labourer
Skilled
Clerical/ Managerial
Tradesman Executive
Weighted
Average
Oil Drilling
Food
Beverages
Textiles, Footwear and Clothing
Furniture & Fixtures
Paper & Printing
Chemicals
Non-Metallic Products
Metal Products
Machinery
Electrical Machinery
Transport Equipment
Miscellaneous
Electricity & Gas Services
Wholesale & Retail Trade
Banking & OFI
Transport
Storage and Warehousing
Communications
Community & Business
Recreation Services
Hotels & Catering Ests
1.6
1.5
1.5
1.6
1.4
1.2
1.5
1.7
1.4
1.8
1.7
1.5
1.2
1.4
1.5
1.3
3.2
1.5
1.3
2.0
1.6
1.5
1.3
1.2
1.2
1.4
1.2
1.6
1.2
1.4
1.4
1.6
1.4
1.3
1.0
1.3
1.4
1.2
1.3
1.3
1.2
1.6
1.4
1.4
1.2
1.4
1.4
1.6
1.2
1.1
1.7
2.0
1.4
1.2
1.3
1.2
1.3
1.4
1.4
1.3
2.5
1.6
1.4
0.8
0.9
1.2
1.6
1.2
1.1
1.0
1.3
1.5
1.4
1.3
1.2
1.1
0.8
1.1
0.7
3.0
1.2
1.5
1.7
1.2
1.3
1.3
1.3
1.4
1.6
1.3
1.4
1.3
1.5
1.4
1.6
1.6
1.3
1.1
1.3
1.4
1.2
1.9
1.4
1.4
1.9
1.5
1.4
All Firms
1.7
1.4
1.6
1.6
1.6
Direct Production
Market Services
1.5
2.0
1.3
1.4
1.4
1.6
1.1
1.7
1.4
1.7
Compiled from data provided by the Department of Industrial and Employment Relations and Employment and Training
Corporation
Economic Survey November 2014
105
Table 6.7 shows percentage changes in the average weekly wage recorded
between September 2013 and September 2014. The weighted average increase
for all firms stood at 1.6 per cent in September 2014. The average wage in
the direct production increased by €3.73 or 1.4 per cent to reach €271.35 in
September 2014, while the average weekly wage rate in the market services
sector increased by €5.08 or 1.7 per cent, thus reaching €312.04 in September
2014. Furthermore, the sub-sectors which recorded the highest percentage
increase were the Community & Business and Transport sub-sectors with an
increase of 1.9 per cent, followed by the Machinery, Textiles, Footwear and
Clothing and Electrical Machinery sub-sectors with an increase of 1.6 per cent.
More specifically, the labourer and the managerial grades in the Transport subsector registered the highest percentage increases at 3.2 per cent and 3.0 per cent,
respectively. This was followed by increases registered in the labourer grade
at 2.0 per cent and the clerical grade at 2.5 per cent both under the Community
& Business sub-sector.
Table 6.8 provides information about the distribution of average weekly wages
along different brackets as at September 2014. The largest share of employees
(35.3 per cent) earned on average a weekly wage in the range of €233.40 €283.39. Similarly, in the case of both direct production and market services,
the highest portion of average wages stood within the same range of earnings.
The second largest proportion of all firms (25.2 per cent) fell within the €283.40
- €333.39 bracket while the percentage of employees earning up to €183.39 per
week stood at 0.7 per cent. The Electrical Machinery sub-sector showed the
highest relative share under lowest income range (3.6 per cent) while the Paper
& Printing and Miscellaneous sub-sectors registered the highest percentage of
earnings above €333.40.
As already stated earlier in this section, it should be noted that the take home
pay of those employed in direct production might be significantly higher due to
production bonuses and allowances. Accordingly, Table 6.8 is only an indicator
of the differences in average weekly wage rates between the different sub-sectors
and between firms arising from the different skill levels and degree of expertise.
106
Economic Survey November 2014
Proportion of Sampled Employees in Wage Ranges
Table 6.8
per cent
Up to
€183.39
€183.40
-€233.39
€233.40 €283.39
€283.40
-€333.39
Over
€333.40
Oil Drilling
Food
Beverages
Textiles, Footwear & Clothing
Furniture & Fixtures
Paper & Printing
Chemicals
Non-Metallic Products
Metal Products
Machinery
Electrical Machinery
Transport Equipment
Miscellaneous
Electricity & Gas
Wholesale & Retail Trade
Banking & OFI
Transport
Storage and Warehousing
Communications
Community & Business
Recreation Services
Hotels & Catering Ests
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.5
3.6
0.0
0.7
0.0
0.0
0.0
0.0
0.0
0.0
0.2
0.0
0.0
47.1
13.3
4.8
81.0
0.0
5.6
4.1
48.1
3.7
78.4
56.3
0.0
9.6
0.0
26.8
0.0
8.2
17.8
0.9
19.4
45.0
28.7
14.3
55.3
52.3
19.0
37.9
16.6
58.9
51.9
90.2
18.4
23.8
86.1
2.9
90.5
49.9
41.5
68.8
64.4
38.6
17.3
45.0
62.7
25.7
19.6
38.8
0.0
62.1
23.7
19.9
0.0
6.1
0.6
15.3
13.9
46.1
0.0
19.2
43.7
16.8
17.8
43.8
27.4
10.0
4.6
12.9
11.7
4.0
0.0
0.0
54.1
17.0
0.0
0.0
0.0
0.9
0.0
40.7
9.5
4.1
14.8
6.2
0.0
16.6
35.7
0.0
4.1
All Firms
0.7
19.7
35.3
25.2
19.1
Direct Production
Market Services
1.4
0.1
29.1
12.7
36.8
34.3
18.5
30.2
14.2
22.7
Sector \ Wage Range
Compiled from data provided by the Department of Industrial and Employment Relations and Employment and
Training Corporation
Economic Survey November 2014
107
7. International Trade
7. International Trade
Exports
Exports contracted by 3.4 per cent when compared to the corresponding period
in 2013, amounting to €2,486.8 million during the January to August period
of 2014. This contraction mainly stemmed from the reduction registered in
machinery and transport equipment and miscellaneous manufactured articles1,
which declined by 14.1 per cent and 8.8 per cent, respectively. The breakdown
of commodity exports is outlined in Table 7.1 and Chart 7.1.
During the period January to August 2014, fuel, which is the largest export
category, accounted for 46.0 per cent of total exports, increasing by 4.0 per
cent and contributing positively by 1.7 percentage points towards total export
growth. Meanwhile, machinery and transport equipment, which represents the
second largest export category with a share of 25.7 per cent of total exports,
declined by €105.4 million over the corresponding period in 2013. This category
contributed negatively by 4.1 percentage points towards total export growth.
Exports of miscellaneous manufactured articles amounted to €249.4 million
during the period under review, decreasing by €23.9 million over the level
Commodity Breakdown of Exports
Table 7.1
€ million
2010
2011
2012
2013
2013
2014
Jan-Aug Jan-Aug
Food, Beverages and Tobacco
Fuels
Chemicals
Machinery and Transport Equipment
Miscellaneous Manufactured Articles*
Other Manufactures
158.2
151.4
226.9
247.5
718.9 1,621.7 2,010.8 1,665.7
273.8
258.8
321.2
357.9
1,180.5 1,241.3 1,322.2 1,112.4
331.1
383.2
400.9
404.5
146.8
162.5
156.6
137.3
121.9
1,100.4
238.0
745.7
273.3
94.1
121.9
1,144.7
238.7
640.3
249.4
91.7
Total Exports
2,809.3 3,819.0 4,438.6 3,925.2
2,573.5
2,486.8
Total Exports excl. Fuels
2,090.4 2,197.3 2,427.9 2,259.5
1,473.1
1,342.1
* This category includes: furniture and fixtures, travel goods and accessories, clothing and accessories, footwear,
scientific instruments and optical equipment.
Note: Totals may not add up due to rounding.
Source: National Statistics Office
Economic Survey November 2014
111
Chart 7.1
Commodity Breakdown of Exports
January - August 2014
Other Manufactures
3.7%
Miscellaneous Manufactured
Articles*
10.0%
Food, Beverages and
Tobacco
4.9%
Machinery and Transport
Equipment
25.7%
Fuels
46.0%
Chemicals
9.6%
recorded in 2013. In fact, this export category contributed negatively by 0.9
percentage points towards total export growth. During the period under review,
this category constituted 10.0 per cent of total exports.
Chemicals, which accounted for 9.6 per cent of total exports with a total value of
€238.7 million, increased by 0.3 per cent when compared to the corresponding
period in 2013, hence contributing 0.03 percentage points towards export
growth. During the period under review, the share of other manufactures, which
is the smallest export category, remained unchanged at 3.7 per cent of total
exports, however, export of other manufactures registered a decline of 2.5 per
cent over the same period a year earlier. This decline contributed marginally
by 0.1 percentage points, towards the decline in total export growth.
Geographical Distribution – Exports
Distribution of exports by geographical area is represented in Table 7.2. During
the January to August period of 2014, exports were primarily directed towards
the European Union (EU), Africa and Asia, which accounted for 28.7 per cent,
28.0 per cent and 18.8 per cent, respectively.
Maltese exports towards Europe, amounted to €877.3 million during the period
under review, decreasing by €161.1 million, when compared to the first eight
112
Economic Survey November 2014
Total Exports by Main Geographical Areas
Table 7.2
€ million
2010
2011
2012
2013
2013
2014
Jan-Aug
Jan-Aug
Europe
EU
Italy
Germany
France
UK
Netherlands
Spain
Others
Euro Area
Other European Countries
Africa
Libya
Others
America
USA
Others
Oceania
Asia
Japan
Singapore
China
Hong Kong
India
South Korea
Others
Ships & Aircraft
1,199.2
1,149.1
157.6
281.6
238.6
131.4
21.8
20.8
297.3
906.8
50.1
182.7
85.3
97.4
228.8
196.1
32.7
11.1
686.5
104.2
229.4
61.2
162.2
9.9
36.3
83.4
501.1
1,579.1
1,301.9
171.2
326.2
244.9
150.4
26.0
35.1
348.1
1,033.6
277.2
234.3
47.7
186.6
226.8
169.0
57.8
5.2
1,092.1
98.0
206.3
71.5
286.1
14.3
18.8
397.1
681.6
1,646.4
1,295.8
174.2
358.3
296.9
124.6
97.4
49.0
195.3
1,042.0
350.7
776.8
199.7
577.1
255.4
198.0
57.4
6.3
1,020.4
116.9
246.6
61.1
340.2
15.0
9.8
230.9
733.2
1,535.1
1,245.8
154.1
348.6
253.0
107.8
47.3
34.6
300.4
953.5
289.3
617.3
238.0
379.3
224.7
170.0
54.7
9.8
1,059.6
196.5
272.2
45.6
199.2
31.5
11.3
303.3
478.7
1,038.4
824.6
80.1
229.7
166.3
72.0
38.6
25.4
212.5
634.9
213.7
390.0
178.2
211.8
154.0
122.7
31.3
5.4
692.3
111.5
191.6
32.5
120.1
19.7
4.4
212.6
293.5
877.3
714.9
97.1
216.0
122.2
62.6
27.2
24.0
165.8
542.0
162.3
697.0
164.7
532.3
156.6
115.4
41.2
8.0
466.9
24.5
117.4
14.5
127.9
22.1
31.2
129.3
281.1
Total Exports
2,809.3
3,819.0
4,438.6
3,925.2
2,573.5
2,486.8
40.9
34.1
29.2
31.7
32.0
28.7
Exports to the EU as % of Total
Note: Totals may not add up due to rounding.
Source: National Statistics Office
months of 2013. This was mainly due to lower fuel imports and electrical
machinery and equipment, which decreased by €119.9 million and €9.4 million,
respectively. Additionally, 38.6 per cent of Maltese exports to Europe were
directed towards Germany and France, amounting to €216.0 million and €122.2
million, respectively.
Concomitantly, Africa became the second largest export partner during the
Economic Survey November 2014
113
period under review, replacing Asia. In fact, exports directed towards Africa
increased by €307.1 million when compared to the corresponding period
in 2013, amounting to €697.0 million during the period under review. It is
noteworthy to indicate that the majority of these movements related to fuel
exports which amounted to €302.3 million. More importantly, exports were
primarily directed towards other African countries, other than Libya, since
exports directed towards the latter remained relatively constant as a share of
total exports.
Exports directed towards Asia amounted to €466.9 million during the period
under review, decreasing by €225.4 million due to declines in exports to
Japan, Singapore and China of €86.9 million, €74.2 million and €18.0 million,
respectively. Moreover, the decline in exports towards Asia was mainly
attributable to the decline registered in fuels of €117.2 million and electrical
machinery and equipment of €107.8 million. Exports to other Asian countries
also declined by €83.3 million.
Imports
Aggregate imports amounted to €4,005.6 million during the January to August
period of 2014, increasing by €42.2 million or 1.1 per cent, over the level
recorded during the corresponding period in 2013. It is pertinent to note that fuels
constituted the largest import category, amounting to 43.2 per cent of aggregate
imports. Moreover, fuels imports, which amounted to €1,729 million during
the period, increased by 5.8 per cent when compared to the same period a year
earlier. In fact, when excluding fuels from total imports, the latter declines by
2.2 per cent when compared to the corresponding period during 2013. Table
7.3 provides details of imports by broad economic category.
Capital and other goods imports, which represented 60.3 per cent of total
imports, amounted to €2,415.2 million during the period under review. This
import category increased by €158.3 million primarily due to the increase in
fuels and capital goods of €94.5 million and €72.9 million, respectively. The
increase in capital goods was primarily attributed to ships and vessels (including
yachts) and contributed 4.0 percentage points towards total import growth.
Concurrently, industrial supplies imports contributed negatively by 3.4
percentage points towards total import growth, during the period under review.
In fact, imports of this category, which amounted to €899.8 million, decreased
by €135.5 million when compared to the corresponding period a year earlier.
This was specifically due to lower imports to the tune of €150.0 million in
114
Economic Survey November 2014
Imports by Broad Economic Category
Table 7.3
€ million
2010
2011
2012
2013
2013
Jan-Aug
2014
Jan-Aug
378.6
337.8
219.2
935.7
404.2
338.6
237.8
980.7
427.5
339.4
256.4
1,023.3
448.8
334.9
252.5
1,036.1
289.6
215.2
166.4
671.2
293.0
228.3
169.2
690.6
Industrial Supplies
Primary
Semi-finished
Finished
Total
59.4
1,237.0
164.5
1,461.0
52.3
1,328.7
134.2
1,515.1
111.6
1,272.9
150.8
1,535.4
95.1
1,273.3
159.9
1,528.3
69.2
858.2
107.9
1,035.2
51.2
750.1
98.4
899.8
Capital and Others
Capital Goods
Fuel
Non-specified and Gold
Total
837.6
1,055.6
40.4
1,933.6
874.5
1,933.8
35.3
2,843.6
810.0
2,788.3
30.5
3,628.8
866.7
2,229.7
22.2
3,118.6
604.4
1,635.2
17.4
2,257.0
677.2
1,729.7
8.3
2,415.2
Total Imports
4,330.3
5,339.4
6,187.5
5,683.1
3,963.4
4,005.6
Total Imports excl. Fuel
3,274.7
3,405.6
3,399.2
3,453.4
2,328.2
2,275.9
Consumer Goods
Food and Beverages
Durable Goods
Others
Total
Note: Totals may not add up due to rounding.
Source: National Statistics Office
integrated circuits.
Imports of consumer goods amounted to €690.6 million, an increase of €19.4
million, thereby contributing 0.5 percentage points towards total import
growth. This stemmed from the increases registered in durable goods, food
and beverages and other capital goods, which increased by €13.2 million, €3.4
million and €2.8 million, respectively.
Geographical Distribution – Imports
Table 7.4 represents the geographical distribution of imports. During the period
under review, imports from Europe accounted for 68.8 per cent of total imports,
of which 73.2 per cent originated from EU countries. Imports from the EU
amounted to €2,019.0 million during the 2014 January to August period, hence
registering a decline of €292.6 million when compared to the corresponding
Economic Survey November 2014
115
period a year earlier. This reflected a reduction of €309.9 million in imports
from Italy attributable to the reduction in fuels imports (€137.3 million),
electrical equipment and machinery (€122.7 million) and cereal (€10.9 million).
It is also pertinent to note that imports from Italy accounted for 18.0 per cent
of total imports, thus remaining the leading exporter to Malta. In addition,
imports from Euro Area countries also decreased by €326.6 million, to stand
at €1,587.8 million.
Meanwhile, imports from Africa, which constituted 4.7 per cent of total imports,
Total Imports by Main Geographical Areas
Table 7.4
€ million
2010
2011
2012
2013
2013
Jan-Aug
2014
Jan-Aug
Europe
EU
Italy
Germany
France
UK
Netherlands
Spain
Others
Euro Area
Other European Countries
Africa
Libya
Others
America
USA
Others
Oceania
Asia
Japan
Singapore
China
Hong Kong
India
South Korea
Others
Ships & Aircraft
3,208.0
2,716.6
1,066.2
295.2
338.5
359.7
172.3
108.8
375.9
2,195.1
491.4
151.5
52.4
99.1
276.9
92.8
184.2
80.2
611.7
53.8
127.5
117.9
12.1
100.7
82.2
117.6
1.9
4,227.2
3,357.5
1,445.9
317.6
376.1
362.6
132.6
165.9
556.7
2,665.2
869.7
35.8
10.9
24.9
353.5
225.3
128.2
20.4
641.9
37.5
100.5
149.7
16.1
78.7
58.8
200.5
60.7
4,894.4
3,950.1
1,987.2
319.9
369.1
372.6
198.8
214.0
488.5
3,335.6
944.3
197.2
110.0
87.2
278.9
134.1
144.8
34.4
769.9
39.4
76.9
161.9
20.6
74.6
87.5
309.0
12.7
4,109.8
3,288.9
1,406.1
321.0
285.6
308.4
202.2
168.2
597.3
2,684.0
820.9
256.4
113.1
143.4
387.9
187.9
200.0
18.1
827.6
49.0
80.8
136.5
17.4
86.9
77.6
379.4
83.2
2,890.5
2,311.7
1,041.0
219.6
200.7
208.2
153.9
92.3
396.0
1,914.3
578.8
216.9
100.0
116.9
183.9
80.9
103.0
13.7
582.7
33.1
63.5
94.8
12.0
58.1
58.4
262.9
75.7
2,756.4
2,019.0
731.1
217.2
145.1
204.0
172.7
142.8
406.1
1,587.8
737.4
188.2
18.3
169.9
457.2
418.7
38.5
66.2
458.8
29.1
35.7
93.8
11.1
64.5
41.9
182.6
78.8
Total Imports
4,330.3
5,339.4
6,187.5
5,683.1
3,963.4
4,005.6
62.7
62.9
63.8
57.9
58.3
50.4
Imports from the EU as % of Total
Note: Totals may not add up due to rounding.
Source: National Statistics Office
116
Economic Survey November 2014
decreased by €28.7 million to amount to €188.2 million. It is noteworthy that
imports from Libya decreased substantially from €100.0 million to €18.3
million, reflecting the current geopolitical tensions in the region.
On the other hand, imports from America increased by €273.3 million, mainly
attributable to higher imports related to fuels (€309.0 million). Geographically,
most of the increase in imports from America was due to increased imports
from the US. Consequently, this increased the share of total imports from the
US from 4.6 per cent to 11.4 per cent. Imports form Oceania also increased
by €52.4 million.
Concurrently, imports from Asia decreased by €123.9 million when compared
to the corresponding period in 2013, to stand at €458.8 million, mainly due
to lower imports originating from other Asian countries, Singapore and South
Korea. Moreover, the largest declines were recorded in fuels of €106.8 million
and electrical equipment and machinery of €44.9 million. Nonetheless, increases
were reported in chemicals imports and pharmaceutical imports of €22.7 million
and €15.9 million, respectively.
During the period under review imports from ships and aircraft increased by
€3.1 million, to reach €78.8 million.
Trade Balance
The visible trade gap widened by €128.9 million or 9.3 per cent, to stand at
€1,518.8 million during January-August 2014, attributable to the decrease in
exports of €86.7 million coupled with an increase in imports of €42.2 million.
In terms of growth, exports contracted by 3.4 per cent whilst imports expanded
by 1.1 per cent. These developments are illustrated in Table 7.5 and Chart 7.2.
Maltese international trade data has in recent years been highly conditioned
by the involvement of offshore oil bunkering activities and trans-shipment of
oils as reflected in imports and exports of fuels. It is worthy to note that such
activities have a limited impact on national accounts, balance of payments
and employment data given their limited economic linkages to the Maltese
economy. When excluding fuels from trade data, the visible trade gap amounted
to €933.9 million, growing by 9.2 per cent over the level recorded during the
corresponding period during 2013. Net non–fuel imports decreased by €52.3
million to amount to €2,275.9 million whilst net non-fuel exports decreased
by €131.0 million to amount to €1,342.1 million.
Economic Survey November 2014
117
Foreign Trade
Table 7.5
€ million
2010
2011
2012
2013
2013
2014
Jan-Aug Jan-Aug
Imports (c.i.f.)
4,330.3 5,339.4 6,187.5 5,683.1
3,963.4
4,005.6
Total Exports (f.o.b.)
2,809.3 3,819.0 4,438.6 3,925.2
2,573.5
2,486.8
Trade Gap
-1,520.9 -1,520.4 -1,748.9 -1,757.8 -1,389.9 -1,518.8
Note: Totals may not add up due to rounding.
Source: National Statistics Office
Chart 7.2
Foreign Trade
Euro Million
Euro Million
0
7,000
-200
6,000
-400
5,000
-600
-800
4,000
-1,000
3,000
-1,200
-1,400
2,000
-1,600
1,000
-1,800
0
-2,000
2010
2011
2012
2013
2013
2014
Jan-Aug
Imports (c.i.f.)
118
Total Exports (f.o.b.)
Trade Gap (Secondary Axis)
Economic Survey November 2014
Geographical distribution – Trade Balance
The developments within the visible trade gap primarily reflected the increase
in the trade deficit with European countries as well as non-European countries.
These developments are outlined in Table 7.6.
The trade deficit with the EU, which is Malta’s largest trading partner, decreased
by €182.9 million, primarily due to the lower trade deficit recorded with Italy.
In fact, during the period under review, the Maltese trade deficit with Italy
decreased by €326.9 million. Furthermore, a decrease in the trade deficit was
also recorded with France. On the other hand, the trade deficits with Germany,
UK, the Netherlands, Spain and other EU countries widened.
Meanwhile, the Maltese trade surplus with Libya and Hong Kong widened by
€68.2 million and €8.7 million, respectively. On the other hand, a decline in
the trade surplus with Singapore was registered.
During the January to August period of 2014, the trade deficit with China
increased by €17.0 million, whilst trade deficits were also registered with US,
Trade Balances with Various Countries
Table 7.6
EU
Italy
Germany
France
UK
Netherlands
Spain
Other EU
€ million
2010
2011
2012
2013
2013
Jan-Aug
2014
Jan-Aug
-1,567.5
-908.6
-13.6
-99.9
-228.3
-150.5
-88.0
-78.6
-2,055.6
-1,274.7
8.6
-131.2
-212.2
-106.6
-130.8
-208.6
-2,654.3
-1,813.0
38.4
-72.2
-248.0
-101.4
-165.0
-293.2
-2,043.1
-1,252.0
27.6
-32.6
-200.6
-154.9
-133.6
-296.9
-1,487.1
-960.9
10.1
-34.4
-136.2
-115.3
-66.9
-183.5
-1,304.1
-634.0
-1.2
-22.9
-141.4
-145.5
-118.8
-240.3
32.9
103.3
50.4
101.9
-56.7
150.1
36.8
-56.3
60.5
105.8
-78.2
270.0
89.7
63.9
77.5
169.7
-100.8
319.6
124.9
-17.9
147.5
191.4
-90.9
181.8
78.2
41.8
78.4
128.1
-62.3
108.1
146.4
-303.3
-4.6
81.7
-79.3
116.8
Other Countries
Libya
USA
Japan
Singapore
China
Hong Kong
Note: Totals may not add up due to rounding.
Source: National Statistics Office
Economic Survey November 2014
119
and Japan. It is also important to note that the trade flows with US reversed
from a surplus of €41.8 during the first eight months of 2013 to a deficit of
€303.3 million during the corresponding period in 2014.
Balance of Payments
The current Balance of Payments statement is based on the Sixth Edition of
the IMF’s Balance of Payments and International Investment Position Manual
(BPM6). Apart from different representations of the reports, the statement is
also incorporating data in respect of special purpose entities as well as adopting
a new treatment for international banks. Currently, conversion to BPM6 format
only covers the period from 2009 to 20142.
Moreover, the income account is now being referred to as the primary income
account and this is now excluding FISIM (financial intermediation service
charges indirectly measured) which is being included under services. Also,
the secondary income account has now replaced the current transfers account.
Another notable change is that the column headings in the financial account
have been changed to net acquisition of financial assets and net incurrence of
liabilities (instead of credits and debits, respectively), consistent with their
contents. Consequently, negative signs are not used for an increase in assets
and positive signs are not used for a reduction in assets. Instead, increases for
both assets and liabilities are denoted with a positive sign while decreases are
denoted with a negative sign. Moreover, direct investment is no longer reported
on a directional principle, that is, inwards and outwards, but rather as assets
and liabilities, in line with the rest of the financial account.
The Current Account
The Maltese current account, as depicted in Chart 7.3, registered a surplus of
€144.6 million or 3.8 per cent of GDP during the first six months of 2014. This
contrasts to the deficit of €23.1 million recorded during the first half of 2013.
This marked improvement was primarily driven by the expansion of the services
surplus coupled with the decrease registered in the primary income account
deficit which together mitigated the increase in the goods account deficit.
Historically, the current account balance is financed through foreign direct
investment (FDI) in the form of equity and reinvested earnings. Nonetheless,
recent developments indicate that portfolio investment through the operations
of foreign owned banks is also a dominant factor underpinning the financing
120
Economic Survey November 2014
Chart 7.3
Current Account
As a per cent of GDP
5
4
3
2
1
0
-1
-2
-3
-4
-5
2010
2011
2012
2013
2013
2014
Jan-Jun
of the current account balance.
The Goods and Services Account
During the first half of 2014, goods and services contributed positively towards
the current account balance. Indeed, during the period under review, the surplus
amounted to €186.2 million, increasing by €37.5 million when compared to the
corresponding period during 2013. This stemmed primarily from the decrease in
goods and services imports which outpaced the decrease registered in exports.
These developments are illustrated in Table 7.7 and Chart 7.43.
The visible trade deficit, which refers to the international trade of physical
goods, amounted to €544.0 million during the first half of 2014, contracting by
€8.8 million when compared to level recorded during the corresponding period
during 2013. These movements stemmed primarily from the developments
within the general merchandise and nonmonetary gold accounts.
During the period under review, general merchandise net imports amounted
to €536.9 million, increasing by €15.7 million over the level recorded during
the first six months of 2013. Nonetheless, as a share of GDP, the general
merchandise deficit decreased by 0.2 percentage points to a level of 14.2 per
cent of GDP. Net imports of nonmonetary gold declined by €6.7 million, to
amount to €3.9 million. In addition, net export for goods under merchanting
Economic Survey November 2014
121
Balance of Payments
Goods, Services and Income Account (Net)
Table 7.7
€ million
2010
2011
2012
2013
2013
Jan-Jun
2014
Jan-Jun
-1,221.7
-30.8
1.3
-1,251.2
-1,181.1
-24.4
-2.3
-1,207.8
-1,083.1
-19.8
-5.4
-1,108.4
-1,074.6
-17.0
-6.6
-1,098.1
-521.2
-10.6
-3.4
-535.2
-536.9
-3.9
-3.2
-544.0
-24.5
580.4
655.1
1,211.0
-44.8
672.1
783.9
1,411.1
-24.0
723.4
902.7
1,602.2
-44.8
768.4
874.7
1,598.3
-34.2
280.9
437.2
684.0
-42.9
314.7
458.4
730.2
-40.3
203.3
493.8
500.2
148.8
186.2
INCOME
Compensation of employees
Investment Income
Total Income
-3.4
-259.8
-263.2
1.4
-211.7
-210.3
-4.6
-292.5
-297.1
-1.5
-326.9
-328.4
-1.1
-216.7
-217.8
-1.1
-67.7
-68.8
Total Goods, Services and Income
-303.4
-7.0
196.7
171.8
-69.1
117.4
GOODS
General Merchandise Transactions
Nonmonetary Gold
Others
Total Goods
SERVICES
Transportation
Travel
Other Services
Total Services
Total Goods and Services
Note: The balance of payments is presented in accordance with the sixth edition of the IMF’s Balance of Payments Manual.
Source: National Statistics Office
Chart 7.4
Goods and Services Account
Euro Million
600
500
400
300
200
100
0
-100
2010
2011
2012
2013
2013
2014
Jan-Jun
122
Economic Survey November 2014
remained relatively stable at 0.1 per cent of GDP.
Concomitantly, the invisible trade surplus, which pertains to the international
trade of services, amounted to a net export of €730.2 million. When compared
to the first half of 2013, net export of services increased by €46.3 million,
specifically due to the increase in services exports of €102.1 million which
more than offset the increase in services imports of €55.8 million.
Net travel receipts of €314.7 million were recorded during the first half of
2014, increasing by €33.8 million. This occurred due to an increase in tourism
earnings of €35.4 million, which more than offset the increase in expenditure
of €1.6 million by Maltese tourists abroad.
During the period under review, net transportation payments amounted to €42.9
million, increasing by €8.7 million when compared to the first half of 2013.
These developments reflected both an increase in transportation payments
coupled with a decrease in transportation receipts.
Net receipts from other services increased by €21.2 million, primarily reflecting
the increase registered in other services receipts of €70.3 million which outpaced
the increase in other services payments of €49.1 million. These developments
were underpinned by the movements within financial services, personal,
cultural, and recreational services as well as telecommunications, computer
and information services.
Financial services net receipts amounted €246.6 million, decreasing by €55.8
million when compared to the first half of 2013 as financial services payments
increased by €42.1 million while receipts declined by €13.8 million.
Meanwhile, net receipts of personal, cultural and recreational services, which
is the largest constituent of other services in terms of net levels, increased
by €36.6 million to stand at €907.4 million during the period under review
mainly reflecting an increase in receipts. Telecommunications, computer and
information services net payments decreased by €12.2 million, to a level of
€14.5 million during the period under review, mainly due to both an increase
in net receipts and lower payments.
Concurrently, net payments of other business services, which includes services
related to research and development, professional and management consultation
as well as technical, trade related and other business services, decreased by €8.6
Economic Survey November 2014
123
million to register €646.2 million. This stemmed from a reduction in payments
of technical, trade related and other business services together with research and
development services whilst payments to professional and management related
services increased. Insurance and pensions services net payments decreased by
€2.3 million, to stand at €35.2 million during the period under review.
Government services registered an increase of €1.5 million in net receipts from
abroad when compared to the level recorded during the first half of 2013. Net
payments of charges for the use of intellectual property decreased marginally
by €0.5 million to stand at €51.1 million during the first half of 2014.
During the period under review, net payments of construction services remained
relatively stable at €1.3 million.
Primary Income
The primary income net payments, which includes investment income and the
compensations of employees, contracted by €148.8million when compared to
the first half of 2013, to reach a level of €108.3 million during period under
review. This primarily reflected the developments within investment income
since compensation of employees and other primary income remained relatively
stable, at €1.1 million and €39.6 million, respectively. It is worthy to note that
other primary income includes taxes on production, subsidies and rental income.
Table 7.8 illustrates these developments within the primary and secondary
income account.
During the period under review, investment income net payments amounted
to €67.7 million, contracting by €149.0 million when compared to the
corresponding period in 2013. This occurred primarily due to the decrease
registered in investment income payments from abroad.
Following the developments within the financial account which was mainly
characterised by lower equity investment by foreign direct investors, higher
borrowing from direct investors and lower lending to direct investors, direct
investment income net payments decreased by €112.9 million to €4.1 billion
during the period under review. These flows primarily reflected lower returns
on equity by quasi-corporations owned by foreign investors.
In line with the developments within portfolio investments involving purchase
of long-term debt instruments (bonds) and equity instruments by domestic
124
Economic Survey November 2014
Balance of Payments
Current Account
Table 7.8
€ million
2010
2011
2012
2013
2013
2014
Jan-Jun Jan-Jun
GOODS AND SERVICES
Exports of Goods and Services 10,139.9 10,952.0 11,964.8 11,840.5 5,745.5 5,726.2
Imports of Goods and Services 10,180.1 10,748.7 11,471.0 11,340.3 5,596.7 5,540.0
Goods and Services Account
-40.3
203.3
493.8
500.2
148.8
186.2
PRIMARY INCOME
Income Received
Income Paid
Primary Income Account
6,668.5 10,073.0 9,964.8 9,514.6 4,743.9 4,738.8
6,968.7 10,340.2 10,315.8 9,920.6 5,001.0 4,847.2
-300.2 -267.2 -351.0 -406.1 -257.2 -108.3
SECONDARY INCOME (Net)
General Government
Other Sectors
Secondary Income Account
89.7
-13.0
76.8
110.0
-23.3
86.6
140.8
-22.5
118.3
177.6
-30.3
147.3
100.9
-15.6
85.3
76.3
-9.6
66.7
Balance on Current Account
-263.7
22.7
261.1
241.5
-23.1
144.6
Note: The balance of payments is presented in accordance with the sixth edition of the IMF’s Balance
of Payments Manual.
Source: National Statistics Office
residents, net receipts of portfolio investment income amounted to €3.9 billion,
increasing by €111.2 million, during the first half of 2014. This increase
reflected the increase in receipts registered in both portfolio investment income
on equity and interest income, which increased by €73.8 million and €37.4
million, respectively.
Other investment net payments amounted to €100.7 million during the period
under review, declining by €75.1 million when compared to level registered
during the corresponding period a year earlier. The reduction of other investment
receipts was the main driver behind these developments, particularly due to
other interest income. This follows the lower short-term lending and the increase
in deposits held with banks observed in the other investment account in the
financial account of the balance of payments.
Economic Survey November 2014
125
Secondary Income
Secondary income, which includes current transfers, decreased by €18.6 million
during the first six months of 2014, to stand at €66.7 million. This largely
reflected the decrease in secondary income receipts of €36.8 million, which
more than offset the decrease of €18.2 million recorded in secondary income
payments.
In addition, this stemmed from both a decrease in net inflows of current transfers
attributable to general government, which more than offset the reduction in net
outflows of current transfers attributable to financial corporations, non –financial
corporations, households and NPISHs.
The Capital and Financial Account
The capital and financial account include transactions made between domestic
and foreign residents which involve the net acquisition of financial assets and
the net incurrence of financial liabilities. The development within the capital
and financial account are illustrated in Table 7.9.
During the period under review, net inflows in the capital account amounted to
€39.7 million, decreasing by €5.5 million when compared to the corresponding
period a year earlier. It is also pertinent to note that this resulted primarily due
to the general government capital transfers. Moreover, this decline in net capital
inflows reflected the increase in capital account outflows of €27.9 million, which
more than outpaced the increase registered in capital inflows of €22.5 million.
During the first half of 2014, direct investment recorded a net assets decreased
by €1.6 billion or 42.4 per cent of GDP, compared to €4.3 billion decline
registered during the corresponding period in 2013. This occurred as the
decrease in asset holdings surpassed the decrease in liability holdings during
the period under review. Asset holdings of direct investment decreased by
€3.4 billion primarily reflecting investment in debt instruments by domestic
residents. Meanwhile, liability holdings of direct investment contracted by
€1.8 billion primarily reflecting lower equity investments by foreigners in
domestic enterprises of €2.9 billion which was only partly offset by higher
liability holdings of debt securities by direct investors in direct investment
enterprises of €1.1 billion. During the period under review, liability holdings
of reinvested earnings increased by €263.9 million as opposed to the decrease
of €68.2 million recorded a year earlier.
126
Economic Survey November 2014
Current, Capital and Financial Flows*
(per cent of GDP)
Table 7.9
2010
2011
2012
2013
2013
Jan-Jun
2014
Jan-Jun
Current Account
-4.0
0.3
3.6
3.2
-0.6
3.8
Capital Account
2.0
1.2
1.9
1.7
1.2
1.0
-47.0
19.6
42.9
-4.0
-14.3
-167.6
116.7
49.9
-3.6
11.1
-122.8
100.9
28.9
-6.1
10.1
-94.9
96.0
22.5
-1.3
-28.7
-119.3
97.9
42.8
-4.6
-37.8
-42.4
109.2
82.8
5.4
-158.2
Reserve Assets
2.4
-0.8
1.7
-0.5
-1.7
11.2
Net Errors and Omissions
1.7
4.3
7.2
-11.9
-23.3
3.1
Financial Account excl. Reserves
Net Foreign Direct Investment
Net Portfolio Investment Equity Flows
Net Portfolio Debt Flows
Net Financial Derivatives
Net Other Investment Flows
* A positive sign represents an increase in assets or in liabilities.
A negative sign represents a decrease in assets or in liabilities.
Note: The balance of payments is presented in accordance with the sixth edition of the IMF’s Balance of Payments Manual.
Source: National Statistics Office
Net asset holdings of portfolio investment increased by €7.3 billion during the
first half of 2014, resulting from the increase in assets holdings which more than
outpaced the increase in liability holdings. These developments where mainly
underpinned by the movements within equity and investment fund shares and
debt asset holdings. Indeed, other financial corporations increased their equity
and investment fund shares asset holdings by €4.5 billion whilst debt asset
holdings also increased by €3.2 billion, mostly reflecting the acquisition of
long-term debt securities by deposit-taking corporations. Meanwhile, portfolio
liability holdings were increased by €438.9 million, primarily due to the
operations of nonfinancial corporations, households and NPISHs.
Net financial derivatives asset holdings increased by €205.5 million during the
first half of 2014, when compared to the decrease in net financial derivative
asset holdings of €166.8 million recorded during the first six months of 2013.
Moreover, these developments stemmed mainly from the operations of other
financial corporations.
Economic Survey November 2014
127
Moreover, other investment net assets decreased by €6.0 billion during the
first half of 2014, when compared to the €1.4 billion decrease registered a year
earlier. This flow primarily reflected the contraction in other investment assets
holdings, which decreased by €4.4 billion when compared to the increase of
€1.1 billion recorded during the first six months of 2013. These developments
were mainly underpinned by the decrease in short-term lending of €4.9 billion,
particularly as a result of the operations by deposit-taking corporations. Net
assets of other account receivables increased by €484.6 million during the
period under review.
Concurrently, holdings of other investment liabilities increased, albeit at a
slower rate than that recorded during the first six months of 2013, by €1.6
billion during the period under review. This reflected primarily an increase in
short term currency and deposits held by deposit taking corporations together
with an increase in trade credits by other financial corporations.
Net errors and omissions amounted to a net inflow of €117.5 million or 3.1 per
cent of GDP during the January –June period of 2014. This contrasts with the net
outflow of €843.3 million registered during the corresponding period in 2013.
The current account surplus of €144.6 million together with the capital account
surplus of €39.7 million and net errors and omissions of €117.5 million more
than financed the financial account deficit of €122.0 million, which resulted in
reserve assets to increase by €423.8 million during the period under review.
It is to be noted that reserve assets decreased by €61.0 million during the first
half of 2013.
Footnote:
1
This category includes; furniture and fixtures, travel goods and accessories, clothing and
accessories, footwear, scientific instruments and optical equipment.
2
In light of the recent adoption of BPM 6, the data prior 2012 still work in progress and subject
to revision.
3
Differences between exports and imports of goods and services within the BOP data and National
Accounts data are mainly due to different cut-off dates.
128
Economic Survey November 2014
8. Financial Developments
8. Financial Developments
Between January and August 2014, Maltese Monetary Financial Institutions’
(MFIs) contribution to the stock of broad money (M3) of the Euro Area
registered an increase of 6.9 per cent reaching €12,424.7 million. This was
mainly the result of a positive contributory effect from a decline in other
counterparts and an increase in the credit counterpart. These developments
more than offset the decline in net claims on non-residents of the Euro Area
during the review period. Following the onset of the global financial and
economic crisis, the European Central Bank (ECB) played a vital role in
sustaining financial intermediation within the Euro Area, as its unprecedented
actions were aimed towards restoring confidence in financial markets as well as
economic and financial stability, while maintaining its price stability objective.
The ECB provided liquidity assistance to the banking sector in the early stages
of the crisis and made use of conventional policy tools such as reductions in
interest rates. As the financial turmoil continued to intensify, the ECB opted
for additional non-standard measures to support the transmission mechanism
of monetary policy. In fact, in addition to a series of Refinancing Operations,
the ECB suspended the weekly fine-tuning operation sterilising the liquidity
injected under the Securities Markets Programme. Moreover, it intensified the
preparatory work related to outright purchases in the Asset Backed Securities
(ABS) market.
Since mid-2011, the Euro registered declines with respect to the three major
currencies, namely the US Dollar, the UK Sterling and the Japanese Yen. This
trend was to some extent different to the initial phase of the financial crisis,
where the Euro currency had retained a degree of strength in respect of the
aforementioned currencies, in particular, in respect of the US Dollar. The latter
was primarily due to the significant easing of monetary policy in the US by
the Federal Reserve. Following these periods, the Euro experienced further
volatility and continued to depreciate throughout the first six months of 2012,
before subsequently registering diverging dynamics in terms of appreciations
vis-à-vis the Japanese Yen and a relatively more stable performance with respect
to the US Dollar and the UK Sterling up until the first nine months of 2014.
At the end of September 2014, the Euro/US exchange rate was around 6.8
per cent lower than the level prevailing a year earlier. Likewise, the Euro also
depreciated vis-à-vis the British Pound by around 7.0 per cent from the level
recorded in the same comparable month in 2013. In addition, during the same
period, the Euro traded at around JPY 138.11 which was 4.8 per cent higher
than that recorded in the corresponding month of the previous year.
Economic Survey November 2014
131
Public Finance
Unless otherwise stated, the analysis in this section is based on Government
finance data as classified in the statement of the Consolidated Fund, where such
data is defined on a cash basis rather than on an accruals system. Consequently,
this data is to be interpreted with caution since developments in Government’s
net financial position may not fully reflect actual spending and revenue flows
on an accruals basis. Table 8.1 presents Government’s fiscal position during the
January to September 2011 to 2014 period, whilst Chart 8.1 illustrates trends
in the consolidated fund balance.
During the January to September 2014 period, the shortfall between recurrent
revenue and total expenditure of central Government increased by €12.5 million
Government Revenue and Expenditure
(January-September)
Table 8.1
€ million
2011
2012
2013
2014
Recurrent Revenue
Tax Revenue
Direct Tax Revenue
Indirect Tax Revenue
Non-Tax Revenue
1,822.1
1,608.7
918.4
690.3
213.4
1,921.4
1,686.0
1,007.9
678.1
235.5
2,056.2
1,831.5
1,125.2
706.3
224.7
2,227.3
1,950.2
1,208.5
741.8
277.1
Total Expenditure
Recurrent Expenditure
Interest on Public Debt
Capital Expenditure
Productive
Infrastructure
Social
2,010.6
1,667.7
159.5
183.4
36.7
110.1
36.6
2,203.6
1,792.2
168.0
243.4
70.2
141.4
31.8
2,327.6
1,905.5
165.5
256.7
75.8
145.4
35.4
2,511.2
2,060.0
172.0
279.2
57.4
169.5
52.3
Balance of recurrent revenue and total expenditure
-188.4
-282.2
-271.4
-283.9
Financed by:
Sinking Funds of Converted Loans
Sinking Fund Contribution and Direct Loan Repayments
Equity Acquisition
Loan Facility Agreement with Hellenic Republic
Loan Facility Agreement with Air Malta plc
9.6
-135.0
0.0
-25.1
-52.0
28.4
-355.1
11.0
0.0
0.0
0.0
-155.5
11.7
0.0
0.0
0.0
-293.2
13.8
0.0
0.0
Public Sector Borrowing Requirement
-390.9
-597.9
-415.2
-563.4
401.6
0.0
510.6
0.0
449.3
0.0
573.8
0.0
Local Loans
Repayment of Loan made by government
Source: The Treasury, Ministry for Finance
132
Economic Survey November 2014
Chart 8.1
Consolidated Fund Balance
Euro million
-400
-350
-300
-250
-200
-150
-100
-50
0
2008
2009
2010
2011
2012
2013
2013
2014
Jan - Sep
to reach €283.9 million. This was the result of higher recurrent, capital and
interest expenditure, which was not offset by the increase in recurrent revenue.
During the period under review, the public sector borrowing requirement
increased from €415.2 million to €563.4 million mainly on account of the
developments in the sinking fund contribution and direct loan repayments. To a
lower extent, a negative influence on the public sector borrowing requirement1
was also exerted by the deterioration in the balance of recurrent revenue and
total expenditure.
Revenue
During the first nine months of 2014 recurrent revenue increased by €171.1
million, over the same period in 2013, to reach €2,227.3 million. The increase
was mainly the result of higher tax revenue, and also, but to a lower extent,
higher non-tax revenue. Developments in the components of Government
revenue for the periods January to September 2011 to 2014 are presented in
Appendix Table 8.1. Furthermore, Chart 8.2 illustrates recent trends in the
components of Government revenue.
During the first three quarters of 2014, the share of Government revenue from
taxes stood at its lowest in the past four years, at 87.6 per cent of total recurrent
revenue. Nonetheless, revenue from taxes increased by €118.7 million during
the period January to September 2014 reaching €1,950.2 million. This increase
Economic Survey November 2014
133
Chart 8.2
Government Total Revenue
Euro million
3,500
3,000
2,500
2,000
1,500
1,000
500
2008
2009
2010
2011
2012
2013
2013
2014
Jan - Sep
Indirect Tax Revenue
Direct Tax Revenue
Non-Tax Revenue
was mainly characterised by the robust performance of direct tax revenue which
increased by €83.3 million, advancing from €1,125.2 million in the first three
quarters of 2013 to €1,208.5 million in the corresponding period of this year.
The increase in direct tax revenue reflected the impact of further economic
growth and higher employment.
Meanwhile, over the same comparative period, revenue from indirect taxes
also registered an increase of €35.4 million, rising from €706.3 million in the
first three quarters of 2013 to €741.8 million. The increase in the latter was
driven by higher receipts from Value Added Tax (VAT) of €50.0 million and
an increase in revenue from licences, taxes and fines of €15.2 million. Lower
income from customs and excise duties of €29.8 million, which was mainly
due to lower revenue from excise duty on petroleum as Enemalta is expected
to pay its dues with Government towards the end of 2014, partially offset the
registered increase in revenue from indirect taxes.
When compared to the same period of 2013, revenue from income tax receipts
during the first nine months of 2014 increased by €45.7 million to reach €728.9
million. This is mainly attributable to the positive developments in the domestic
labour market and in the property and financial services sectors, as reflected
in higher proceeds under the Final Settlement System and from capital gains
taxation, respectively. These positive developments more than offset the impact
of the further adjustment in the income tax bands implemented earlier in 2014.
134
Economic Survey November 2014
Developments in the domestic labour market are also reflected in higher revenue
from social security contributions which, during the first nine months of 2014,
increased by €37.6 million to €479.5 million. The positive developments in
social security contributions are also supported by the pension reform initiatives
legislated in 2006, resulting in higher social contribution rates and a lower
number of retirees reflecting the increase in the retirement age.
During the period under review, receipts from customs and excise duties
decreased by €29.8 million to €111.8 million. The decline was mainly due to
lower revenue from excise duty on petroleum as Enemalta is expected to pay
its dues towards the end of 2014. This was partially offset by higher proceeds
from excise duty on cigarettes and cement following the measures announced
in the 2014 Budget.
When compared to January to September 2013, revenue from licenses, taxes
and fines increased by €15.2 million in the corresponding 2014 period, reaching
€175.9 million. This increase was mainly on account of higher proceeds from
the annual circulation licence fee, and to a lower extent, higher proceeds from
duty on documents and the motor vehicle registration tax.
Receipts from VAT during the January to September 2014 period amounted to
€454.0 million, thus increasing by €50.0 million when compared to the January
to September 2013 period. Alongside with a more pronounced consumption
pattern evident in the Maltese economy, these developments partially reflect
higher expenditure by foreign tourists in Malta during the period under review.
Non-tax revenue, which mainly comprises grants, the transfer of profits
generated by the Central Bank of Malta, fees of office, and rents, increased by
€52.4 million in the first nine months of 2014 to reach €277.1 million when
compared to the corresponding period in 2013. This increase was mainly
underpinned by significantly higher revenue from grants.
When compared to the first three quarters of 2014, revenue from grants increased
by €41.8 million during the period under review, reflecting higher Structural and
Cohesion Funds under the EU 2007-2013 Financial Framework. During the first
nine months of 2014, revenue from miscellaneous receipts increased by €5.4
million to €21.0 million. Furthermore, revenue from fees of office and rental
income also increased by €5.0 million and €3.6 million, respectively to reach
€29.9 million and €22.6 million. Moreover, the transfer of profits of the Central
Bank of Malta (CBM) reached €44.0 million for the January to September 2014
period, an increase of €2.0 million when compared to the same period in 2013.
Economic Survey November 2014
135
Meanwhile, while revenue from reimbursements and revenue from repayment
of Government loans and interest remained relatively stable during the period
under review and totalled €18.9 million, revenue from dividends on investments
decreased by €5.8 million to €5.1 million during January to September 2014.
Expenditure
During January to September 2014, total Government expenditure, comprising
both recurrent and capital expenditure, as well as interest payments on public
debt, increased by €183.6 million over the same period in 2013, to €2,511.2
million. This increase was mainly attributable to higher recurrent expenditure.
During the first three quarters of 2014, recurrent expenditure was up by €154.5
million over the corresponding period of the previous year. At the same time,
capital expenditure increased by €22.5 million to €279.2 million. Moreover,
interest on public debt increased by €6.5 million to €172.0 million. Chart 8.3
illustrates recent trends in Government expenditure.
Chart 8.3
Government Total Expenditure
Euro million
3,500
3,000
2,500
2,000
1,500
1,000
500
2008
2009
2010
2011
2012
2013
2013
2014
Jan - Sep
Capital Expenditure
136
Recurrent Expenditure
Interest on Public Debt
Economic Survey November 2014
Recurrent Expenditure
Recurrent expenditure is classified under four categories, namely Personal
Emoluments, Operational and Maintenance Expenditure, Contributions to
Government Entities, and Programmes and Initiatives. The Programmes and
Initiatives category accounted for more than half the rise in recurrent expenditure
during the nine months up to September 2014.
Programmes and Initiatives, which accounted for 62.3 per cent of total recurrent
expenditure, comprises of expenditure and social transfer payments made
in respect of ad hoc programmes run by Government, as well as subsidies,
payments and grants for the provision of services to citizens and to charitable and
private institutions but excludes operational costs of Government departments.
During the first three quarters under review, this category of expenditure
increased by €82.3 million to €1,282.9 million.
This increase was on account of higher outlays to various programmes and
initiatives in prime sectors including transport, environment, energy, health,
education and social welfare. More specifically, higher expenditure outlays were
allocated towards the Public Service Obligation due to the temporary takeover
of the Public Transport by Government, the Transport Malta administration fee,
the ex-gratia grant scheme for motor vehicles and initiatives with respect to
landscaping and local councils. With respect to social welfare, higher outlays
were recorded in respect of social security benefits and towards the State
Contribution which also features as revenue. Furthermore, higher outlays
were also recorded in respect of medicines and surgical materials, towards
assistance to help the elderly live independently, energy support measures,
support to voluntary organisations and Church schools, and towards free child
care provision to all. On the other hand, lower outlays were recorded towards
ECO reduction and street lighting.
Personal Emoluments, which in the first nine months up to September 2014
accounted for 23.6 per cent of total recurrent expenditure, includes all salaries
and wages paid to elected officials and civil servants, as well as any bonuses and
supplements paid to employees in excess of standard remunerations including
any allowances and overtime payments. In the period under review, this category
of expenditure increased by €36.8 million to €485.9 million when compared
to the corresponding period of the previous year.
Contributions to Government Entities, which reflects funding to Government
entities including Parastatals, Corporations and Authorities stood at 9.5 per cent
of total recurrent expenditure. This category of expenditure reached €196.2
Economic Survey November 2014
137
million during the period under review, thus representing an increase of €31.2
million when compared to the same period a year earlier. Developments in this
category mainly reflected higher outlays towards the University of Malta and
towards the Employment & Training Corporation (ETC). A higher allocation
was also registered towards Mount Carmel Hospital and Karen Grech Hospital,
together with a higher allocation towards the Drainage Directorate.
During the first three quarters of 2014, Operational and Maintenance expenditure
represented a share of 4.6 per cent in total recurrent expenditure and includes
payments for utilities, contractual services, materials and supplies, transport
and rent. During the period under review, this category of expenditure increased
marginally by €4.3 million over the same period in 2013, to €95.0 million,
mainly due to higher rent expenditure by the Ministry for Tourism. On the
other hand, lower outlays were registered under this category of expenditure
in respect of Mater Dei Hospital contractual services.
Appendix Table 8.2 presents the developments in Government’s recurrent
expenditure on a cost centre basis for the first nine months of 2014. The
nomenclature of Ministries as well as the cost centres referred to in this
Chapter reflect the allocation of portfolios and assignment of responsibility
for Government Departments and Government Entities under the new
administration as from March 2013. A direct comparison with data for past
years is therefore not always possible.
Around a third of Government’s total recurrent expenditure consists of retirement
pensions, children’s allowances, social assistance, as well as other benefits.
These expenditures are highly influenced by developments in compensation
of employees, inflation, as well as demographic changes. During the first three
quarters of 2014, these welfare payments increased by €14.9 million to €638.6
million, mainly due to higher contributory benefits since the increase in noncontributory benefits was more subdued. The increase in contributory benefits
of €9.2 million mainly reflects increases in outlays towards retirement pensions
including the increase in pensions due to the cost of living adjustment (COLA).
Meanwhile, the increase in non-contributory benefits was mainly due to higher
outlays towards social assistance, which increased by €4.2 million. Expenditure
by the Department of Social Security relating to the State contribution in terms
of the Social Security Act 1987 (Cap. 318), which also features as revenue,
increased by €10.6 million to €152.4 million during the first three quarters of
2014.
138
Economic Survey November 2014
Capital Expenditure
Central Government capital expenditure consists of three broad categories,
namely productive investment, infrastructural investment and capital outlays
on social development. Capital expenditure is presented on a Ministry basis as
per the Departmental Accounting System (DAS).
Total capital expenditure increased further by €22.5 million to €279.2 million
during the first nine months of 2014 over the same period in 2013. The increase
in expenditure was due to higher infrastructural and social capital outlays,
which more than outweighed lower productive investment expenditure. The
share of infrastructural investment in Government’s total capital programme
increased by 4.1 percentage points to 60.7 per cent in the first nine months of
2014, whilst the share of social investment capital outlays increased by 4.9
percentage points to 18.7 per cent. Furthermore, spending towards productive
investment made up 20.6 per cent of total capital expenditure in the January to
September 2014 period, 9.0 percentage points lower than the share recorded
during the corresponding 2013 period. Appendix Table 8.3 displays a breakdown
of Government’s capital expenditure programme for the January to September
2011-2014 period. Chart 8.4 presents developments in capital expenditure over
recent years.
During the period under review, Government’s capital outlays for productive
investment decreased by €18.4 million to €57.4 million. This decrease was
Chart 8.4
Capital Expenditure
Euro million
260
240
220
200
180
160
140
120
100
80
60
40
20
0
2008
2009
2010
2011
2012
2013
2013
2014
Jan - Sep
Social
Economic Survey November 2014
Infrastructural
Productive
139
mainly underpinned by a lower equity injection of €15.0 million in the national
air carrier, down by €25.0 million from €40.0 million last year. This was partly
offset by increases recorded in expenditure towards productive investment
classified under the ‘Other’ category, as well as higher capital outlays financed
from the EU Agriculture Fund for Rural Development, EU Agriculture
Guarantee Fund and EU Fisheries Fund.
Infrastructural investment recorded an increase of €24.1 million, reaching
€169.5 million during the January to September 2014 period when compared to
the same period a year ago. This increase was largely the result of a €21.1 million
increase in capital outlays with respect to road construction and improvement
together with an increase in capital outlays towards several infrastructural
projects co-financed by EU funds. Higher outlays on infrastructural investment
were also registered in relation to the ICT core services agreement and outlays
towards the integrated flood relief project. However, these higher outlays
were partially offset by lower expenditure towards the waste water treatment
infrastructure. Lower expenditure outlays were also recorded in relation to
development of industry, acquisition of property, and infrastructural investment
classified under the ‘Other’ category.
Social investment amounted to €52.3 million in the first three quarters of 2014,
increasing by €16.9 million over the corresponding period of the previous year.
This increase was mainly due to an increase in investment funded by the External
Borders Fund, which mainly consists of capital outlays on inshore patrol crafts
and to a lesser extent, expenditure on the modernisation of communications
infrastructures. Other increases were also attributable to initiatives in the
education, waste management and health sectors, in particular in respect of
projects by the University of Malta, new football facilities in Malta and Gozo,
and works and equipment at Mater Dei Hospital. Meanwhile, lower capital
outlays were recorded towards social investment classified under the ‘Other’
category.
International Comparison
The following is an analysis of the fiscal position of the EU Member States
between 2011 and 2013. Table 8.2 presents the Government budgetary position
as a percentage of GDP, while Table 8.3 presents the general Government debt
position, also as a percentage of GDP. Data presented in this section is based
on the ESA 2010 system of national accounts2, and is therefore not directly
comparable with data presented in previous sections of this Chapter and with
data presented in the same section of previous years’ Survey. It is pertinent
to note that data for EU Member States, including data for Malta, reflect the
140
Economic Survey November 2014
General Government Net Lending (+) or Borrowing (-)
as a percentage of GDP
Table 8.2
per cent
2011
2012
2013
-2.6
-3.9
-2.0
-7.7
-5.8
-2.9
-2.1
1.0
-1.0
-5.1
-0.9
-10.1
-5.5
-12.6
-3.5
-3.4
-9.0
0.3
-4.3
-4.9
-7.4
-5.5
-4.1
-6.2
-9.4
-0.1
-7.6
-2.3
-4.1
-0.5
-5.6
-5.8
-4.0
-3.9
-0.3
-2.1
-4.9
0.1
-8.6
-2.3
-8.0
-3.0
-0.8
-3.2
0.1
-4.0
-3.7
-5.5
-3.0
-4.2
-3.7
-10.3
-0.9
-8.3
-1.5
-2.9
-1.2
-5.2
-4.9
-1.3
-0.7
-0.5
-2.4
-4.1
0.1
-12.2
-2.4
-5.7
-2.8
-0.9
-2.6
0.6
-2.3
-4.0
-4.9
-2.2
-2.6
-14.6
-6.8
-1.3
-5.8
EU 28
Euro Area
United States
Japan
-4.5
-4.1
-9.9
-9.8
-4.2
-3.6
-8.6
-8.7
-3.2
-2.9
-5.8
-8.2
Malta
-2.6
-3.7
-2.7
Austria
Belgium
Bulgaria
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
United Kingdom*
* Data pertains to UK financial year (1 April to 31 March)
Source: Eurostat, IMF World Economic Outlook
Economic Survey November 2014
141
General Government Gross Debt
as a percentage of GDP
Table 8.3
per cent
2011
2012
2013
Austria
Belgium
Bulgaria
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
United Kingdom*
82.1
102.1
15.7
59.9
66.0
41.0
46.4
6.0
48.5
85.0
77.6
171.3
81.0
111.1
116.4
42.7
37.3
18.5
61.3
54.8
111.1
34.2
43.5
46.2
69.2
36.1
81.9
81.7
104.0
18.0
64.4
79.5
45.5
45.6
9.7
53.0
89.2
79.0
156.9
78.5
121.7
122.2
40.9
39.9
21.4
66.5
54.4
124.8
37.3
52.1
53.4
84.4
36.4
85.8
81.2
104.5
18.3
75.7
102.2
45.7
45.0
10.1
56.0
92.2
76.9
174.9
77.3
123.3
127.9
38.2
39.0
23.6
68.6
55.7
128.0
37.9
54.6
70.4
92.1
38.6
87.2
EU 28
Euro Area
United States
Japan
80.8
85.8
99.0
229.8
83.5
89.0
102.5
237.3
85.4
90.9
104.2
243.2
69.8
67.9
69.8
Malta
* Data pertains to UK financial year (1 April to 31 March)
Source: Eurostat, IMF World Economic Outlook
142
Economic Survey November 2014
Government deficit and debt data based on figures reported in the second 2014
notification by EU Member States for the years 2011-2013, for the application
of the excessive deficit procedure (EDP) in accordance with Council Regulation
(EC) No. 479/2009, amended by Council Regulation No. 679/2010. Data for
the United States and for Japan is reproduced from the International Monetary
Fund October 2014 update of the World Economic Outlook.
The slow economic recovery that commenced in 2010 and impinged positively
on the fiscal position of the EU economies was sustained throughout 2011 and
2012. Indeed, in the Euro Area (EA18) the Government deficit-to-GDP ratio
decreased from 6.1 per cent in 2010 to 3.6 per cent in 2012, and in the EU28 the
ratio declined from 6.4 per cent to 4.2 per cent. Despite the slight deterioration in
economic conditions in 2012 (real GDP growth in the EU28 was a negative 0.4
per cent in 2012, while a positive 1.6 per cent growth was registered in 2011),
the fiscal position of the EU economies was sustained in 2012. As economic
growth turned once again positive in 2013, the Government deficit-to-GDP
ratio in EA18 improved by a further 0.7 percentage points to 2.9 per cent in
2013. In the EU28, the ratio declined from 4.2 per cent to 3.2 per cent of GDP.
In 2013, 18 Member States (MSs) recorded an improvement in their Government
balance relative to GDP when compared with 16 MSs in 2012. The most
pronounced improvement in the budget balance was recorded in Spain, which
registered a 3.5 percentage points decrease in the Government deficit-to-GDP
ratio, to 6.8 per cent of GDP. Spain3 exited successfully the financial assistance
programme for the recapitalisation of financial institutions in January 2014
although after exiting the programme, the monitoring of the Spanish economy
and its financial sector continues in the context of the post-programme
surveillance.
A notable fiscal consolidation effort of 3.2 and 2.5 percentage points of GDP
was undertaken by Denmark and the United Kingdom, respectively, supported
by a stronger economic recovery compared to the rest of the EU. Meanwhile,
a fiscal effort of 2.7 and 2.3 percentage points was registered by the Czech
Republic and Ireland in spite of their subdued economic growth. Among the
other large economies, a fiscal adjustment of 0.8 and 0.2 percentage points of
GDP was undertaken in France and Italy respectively amidst a background of
subdued or negative economic growth in these Member States. Luxembourg and
Germany were the only two Member States to register a budget surplus in 2013.
The Netherlands, Slovakia, Belgium, and Malta also registered notable
improvements in their budget balance of between 1.0 and 1.7 percentage points.
Economic Survey November 2014
143
Bulgaria, Sweden, Finland, Poland, Estonia, Latvia and Hungary registered only
marginal deteriorations of between 0.1 and 0.7 percentage points. Nonetheless,
a total of 10 MSs had budget deficits in excess of 3.0 per cent of GDP, of which
two had a deficit-to-GDP ratio in excess of 10.0 per cent. Slovenia registered
both the highest fiscal imbalance, as well as the highest deterioration in its
budget balance in 2013, as its deficit-to-GDP ratio increased from -3.7 per cent
in 2012 to -14.6 per cent in 2013.
In 2014, the Council closed excessive deficit procedures for Austria, Belgium,
Czech Republic, Denmark, Finland, the Netherlands and Slovakia. It adopted
decisions abrogating previous Council decisions on the existence of excessive
deficits in these countries, confirming that they have reduced their deficits
below 3.0 per cent of GDP, as defined in accordance with Article 126(6) of the
Treaty on the functioning of the European Union (ex Article 104(6) of the Treaty
establishing the European Community) and specified in the Stability and Growth
Pact legislation. As a consequence, 11 of the EU’s 28 MSs remain subject to
an excessive deficit procedure, down from 24 during a 12-month period in
2009-2010. It is to be noted that many procedures were opened subsequent to
the global financial crisis and recession of 2008 and 2009.
Meanwhile, despite fiscal consolidation efforts, Government debt continued
to increase in both the EA18 and the EU28. Indeed, in the Euro Area the
Government debt-to-GDP ratio increased from 85.8 per cent at the end of 2011
to 90.9 per cent at the end of 2013, and in the EU28 the ratio increased from
80.8 per cent to 85.4 per cent. It is interesting to note that although 18 EU
Member States recorded an improvement in their budget balance, only three of
these, namely Denmark, Lithuania and Austria, managed to actually reduce the
debt-to-GDP ratio. Germany reduced the debt-to-GDP ratio despite registering
no change in its budget balance. Furthermore, it is to be noted that Latvia and
Hungary decreased their debt ratio despite the marginal deterioration in their
budget balance. Moreover, 16 EU Member States registered Government debt
ratios higher than 60.0 per cent of GDP in 2013. Out of these, Greece, Portugal,
Italy, Ireland, Belgium and Cyprus reported debt-to-GDP levels in excess of
100.0 per cent of GDP.
The two remaining countries undergoing a programme of fiscal and economic
adjustment, Cyprus and Greece, recorded an increase in their debt-to-GDP
ratio of 22.7 and 18.0 percentage points, respectively, to reach 102.2 and
174.9 per cent, respectively by the end of 2013. Meanwhile, the debt-to-GDP
ratio in Croatia and Slovenia increased in excess of 11.0 percentage points.
Nevertheless, several Member States still reported low ratios of Government
debt-to-GDP at the end of 2013, in particular Estonia, Bulgaria and Luxembourg
144
Economic Survey November 2014
which registered debt ratios below 25.0 per cent of GDP.
In 2013, the United States (US) reported a Government fiscal deficit-to-GDP
ratio of 5.8 per cent, representing a 2.8 percentage point improvement from
that reported in 2012. The gross debt-to-GDP ratio increased further from
102.5 per cent in 2012 to reach 104.2 per cent in 2013. Meanwhile, in Japan,
the Government deficit-to-GDP ratio in 2013 decreased to 8.2 per cent of GDP
when compared to 8.7 per cent recorded in 2012. Furthermore, Japan’s debtto-GDP ratio increased to 243.2 per cent in 2013 when compared to 237.3
per cent in 2012. In this context, it is noted that both the EU28 and the EA18
compare favourably to the US and Japan with respect to both the deficit and
debt ratios to GDP.
Economic Survey November 2014
145
Box 8.1
General Government Budgetary Developments
The Quarterly Accounts of General Government published by the National
Statistics Office (NSO) depict the Government’s fiscal position using the
updated European System of Accounts (ESA) 2010 methodology. Under this
system, mandatory for all EU Member States, adjustments are carried out to the
cash balances of the Consolidated Fund transactions to include all government
accounts, exclude all financial transactions, and include accrual adjustments.
Moreover, data pertaining to Extra Budgetary Units and Local Councils are
also included. It is therefore pertinent to note that the data presented below is
not comparable to that classified in the statement of the Consolidated Fund as
provided in other sections of this Chapter. Nevertheless, conformity to the use
of ESA 2010 methodology in line with the procedure defined in Article 104
of the Maastricht Treaty, allows for the international comparability of data
for reporting purposes. The following analysis relates to general Government
budgetary developments during the first two quarters of 2014.
It is worth noting that due to seasonal factors, a larger proportion of revenue
and to a lesser extent expenditure materialises in the last quarter of the year. As
a result, the in-year budgetary performance will not be symmetrical between the
first half and the second half of the year. Seasonal patterns may also vary from
one year to the next due to the timing of payments and receipts. Therefore, inyear deficit-to-GDP figures which measure the in-year budgetary performance
should be read with caution.
As depicted in Chart 1, during the first half of 2014 the deficit ratio stood at 5.1
per cent of GDP, deteriorating by 1.0 percentage point over the corresponding
period in 2013 as the rise in the expenditure ratio more than outweighed the
increase in the revenue ratio to GDP.
The revenue-to-GDP ratio for the first six months of 2014 increased from 40.0
per cent to 40.7 per cent. The increase of 0.7 percentage points was mainly
underpinned by a higher ratio to GDP of other capital transfers and investment
grants of 0.9 percentage points stemming from revenue from EU funds under the
2007-2013 Financial Framework. In addition, taxes on production and imports
as a percentage of GDP increased by 0.8 percentage points. The increase of
1.7 percentage points of GDP was partially offset by a lower ratio to GDP of
current taxes on income and wealth of 1.2 percentage points.
146
Economic Survey November 2014
Box 8.1 continued
Chart 1
Public Finance Developments
(in accordance with ESA 2010 methodology)
% of GDP
% of GDP
4
50
45
2
40
35
0
30
25
-2
20
-4
15
10
-6
5
0
-8
2010
2011
2012
2013
2013
2014
Jan - Jun
GG Expenditure
GG Revenue
GG Deficit (secondary axis)
When compared to the first two quarters of 2013, the expenditure-to-GDP ratio
in the first half of 2014 increased by 1.7 percentage points to 45.7 per cent of
GDP. This increase is mainly on account of higher outlays on gross fixed capital
formation, primarily reflecting higher expenditure on projects financed from EU
funds under the 2007-2013 Financial Framework as well as higher outlays on
projects financed from national sources. Higher ratios were also recorded for
intermediate consumption and compensation of employees. Meanwhile, a lower
ratio of capital transfers was mainly the result of lower expenditure related to
the equity injection in the national airline as part of the ongoing restructuring
programme.
Economic Survey November 2014
147
Monetary Developments
During January-August 2014, the contribution of Maltese monetary financial
institutions (MFIs) to the stock of Euro Area Broad Money (M3) increased.
This was mainly the result of an increase in overnight deposits. Deposits
redeemable at notice up to three months and deposits with agreed maturity of
up to two years also contributed positively, albeit marginally, towards M3. On
the other hand, there was a decline in net claims on non-residents of the Euro
Area while developments in the credit and other counterparts components
contributed positively to M3. The Bank Lending Survey (BLS) conducted
in July 2014 revealed that credit standards applied to lending to enterprises
and households remained unchanged during the second quarter of the year.
Meanwhile, according to the CBM quarterly review for the second quarter of
2014, local banks reported that demand for loans picked up somewhat during
the aforementioned quarterly review period. At the same time, depositors
continued to prefer holding highly liquid short-term deposits, reflecting the
relatively low interest rate environment.
Contribution of Resident MFIs to Euro Area Monetary
Aggregates
During the first eight months of 2014, the contribution of Maltese resident MFIs
to total monetary aggregates (M3) of the Euro Area increased by 6.9 per cent,
reaching €12,424.7 million in comparison to €11,626.3 million registered in
December 2013. Higher overnight deposits were the main driver of such an
increase. In addition, deposits with agreed maturity of up to three months and
up to two years also contributed positively, albeit very mildly. The dynamics
in the main monetary indicators are illustrated in Table 8.4. The developments
show the continued preference towards short-term liquid money balances in
the form of overnight deposits, though two-year term maturity deposits remain
substantial.
Narrow money (M1) reached €7,483.2 million between January-August 2014,
reflecting an increase of 11.3 per cent when compared to €6,725.7 million
recorded in December 2013. This was largely the result of a 12.2 per cent
increase in overnight deposits during the same corresponding period. The
increase in overnight deposits during the first eight months of 2014 resulted
primarily from higher deposits by Maltese residents as well as higher deposits
from Euro Area residents. Throughout the same period, currency issued grew
by 3.9 per cent, reaching €808.6 million in August 2014, though the positive
contribution to M1 was low due to its small share.
148
Economic Survey November 2014
Contribution of Resident MFIs to Euro Area Monetary Aggregates(1)
Table 8.4
€ million
2013
(Dec)
2014
(Mar)
2014
(Jun)
2014*
(Aug)
Aug-14 Dec-13
% Change
Narrow Money (M1)
6,725.7
7,014.8
7,120.0
7,483.2
11.3
Currency issued(2)
778.7
5,947.0
777.9
6,236.9
800.5
6,319.4
808.6
6,674.5
3.9
12.2
11,460.9
6,725.7
113.1
11,875.2
7,014.8
111.4
11,762.7
7,120.0
112.4
12,298.7
7,483.2
121.2
7.3
11.3
7.2
4,622.1
4,749.1
4,530.3
4,694.3
1.6
11,626.3
11,460.9
165.4
12,037.0
11,875.2
161.7
11,890.2
11,762.7
127.4
12,424.7
12,298.7
126.0
6.9
7.3
-23.8
Overnight deposits(3)
Intermediate Money (M2)
Narrow Money (M1)
Deposits redeemable at notice up to 3 months(3)
Deposits with agreed maturity up to 2 years(3)
Broad Money (M3)(4)
Intermediate Money (M2)
Debt securities issued up to 2 years initial maturity
* Provisional
(1)
Figures show the contribution of Maltese monetary financial institutions (MFIs) to the Euro Area totals, and include deposit liabilities
(2)
Comprises the Central Bank of Malta’s share of Euro banknotes issued by the Eurosystem, plus coins issued by the Bank on behalf
(3)
Deposits with MFIs exclude interbank deposits and deposits held by central government.
(4)
M3-M2 comprises repurchase agreements and debt securities up to 2 years’ maturity issued by MFIs in Malta less holdings by MFIs in Malta
to both residents of Malta and other Euro Area residents.
of the Treasury, less holdings of issued Euro banknotes and coins held by the MFI sector.
of such securities issued by MFIs anywhere in the Euro Area. Figures also include MMFs shares/units issued less holdings in such
units by MMFs and credit institutions resident in the Euro Area and holdings by non-residents of the Euro Area.
Source: Central Bank of Malta
During the first eight months of 2014, deposits redeemable at notice up to
three months increased by 7.2 per cent over the level registered in December
2013, reaching €121.2 million. This increase was driven by the dynamics in
deposits from residents of Malta as the developments in deposits from other
Euro Area residents were negligible due to their very small share. During the
period January-August 2014, deposits with an agreed maturity of up to two
years registered an increase of 1.6 per cent when compared to the same period
in 2013, thus reaching €4,694.3 million in August 2014.
Table 8.5 portrays the developments in resident deposits. Between JanuaryAugust 2014, total resident deposits grew by 9.3 per cent and stood at €10,569.1
million, in contrast to December 2013. This was mainly the result of the positive
contribution from overnight deposits, which grew by 11.8 per cent during the
Survey period. Deposits redeemable at notice up to three months increased
by 7.2 per cent, during the period under review, while two year maturity
deposits increased by 5.5 per cent. Nevertheless, the latter had a higher positive
contribution towards the growth in total resident deposits.
Economic Survey November 2014
149
Resident Deposits
Table 8.5
€ million
2011
(Dec)
2012
(Dec)
2013
(Dec)
2014*
(Aug)
Aug-14 Dec-13
% Change
Overnight Deposits(1)
Deposits redeemable at notice
up to 3 months
Deposits with agreed maturity
up to 2 years
4,590.9
5,047.7
5,771.0
6,454.7
11.8
122.5
151.7
113.0
121.1
7.2
3,693.1
3,683.0
3,783.7
3,993.2
5.5
Total resident deposits
8,406.4
8,882.4
9,667.7
10,569.1
9.3
* Provisional
(1)
Overnight deposits are deposits withdrawable on demand and exclude interbank deposits and deposits held by
central Government.
Source: Central Bank of Malta
Contribution of Resident MFIs to Counterparts to Euro Area
Monetary Aggregates
Table 8.6 portrays the changes in the contribution of resident MFIs to
counterparts to Euro Area monetary aggregates since December 2013. During
the first eight months of 2014, Maltese MFIs’ contribution to the Euro Area
broad money stock (M3) increased, led by the positive contributory effect from
a decline in other counterparts and an increase in the credit counterpart which
more than offset the decline in net claims on non-residents of the Euro Area.
In the period January-August 2014, the credit counterpart of broad money
reached €15,114.6 million, representing an increase of 4.7 per cent when
compared to December 2013. This increase was mainly the result of higher
credit to both Maltese residents and other non-Maltese Euro Area residents.
During the first eight months of 2014, credit to residents of Malta increased by
4.9 per cent, reaching €11,685.6 million when compared to December 2013.
Notwithstanding that due to its share, lending to the private sector was the main
driver of the developments in total credit to residents of Malta, both lending to
general Government and to the private sector increased at rates of 9.5 per cent
and 3.5 per cent, respectively during the period under review. Concurrently,
credit to other Euro Area residents increased by 4.3 per cent, reaching €3,428.9
million in August 2014. This increase was driven by a 9.5 per cent increase in
credit to the private counterpart which more than offset a decline in credit to
150
Economic Survey November 2014
Contribution of Resident MFIs to Counterparts to Euro Area Monetary Aggregates
Table 8.6
2013
(Dec)
2014
(Mar)
2014
(Jun)
2014*
(Aug)
Aug-14 Dec-13
%
Change
Broad Money (M3)
11,626.3
12,037.0
11,890.2
12,424.7
6.9
Credit Counterpart
Credit to residents of Malta
Credit to general Government
Credit to other residents
Credit to other Euro Area residents
14,433.3
11,144.2
2,478.0
8,666.2
3,289.1
14,822.0
11,357.9
2,640.7
8,717.2
3,464.1
14,959.1
11,546.0
2,735.3
8,810.7
3,413.1
15,114.6
11,685.6
2,712.5
8,973.1
3,428.9
4.7
4.9
9.5
3.5
4.3
Net claims on non-residents of the
Euro Area
9,567.1
8,941.5
8,624.7
8,003.7
-16.3
12,374.0
11,726.5
11,693.7
10,693.5
-13.6
Other counterparts (net)
* Provisional
(1)
This does not represent holdings of M3 by residents of Malta but rather the contribution of MFIs in Malta to the Euro Area aggregate.
(2)
Credit includes, besides lending, claims in the form of debt securities and shares and other equity.
(3)
Includes net interbank claims/liabilities within the MFI sector. These counterparts make a negative contribution to M3.
Source: Central Bank of Malta
general Government of 3.9 per cent.
Table 8.7, which displays loans to Maltese residents excluding general
Government, delves further into the 3.5 per cent increase in private sector credit
during the first eight months of 2014 when compared to December of last year.
This increase was mainly the result of further increases in loans to ‘households
and individuals’ followed by increases in loans to ‘electricity, gas and water
supply’, as well as to ‘manufacturing’. Indeed, the aforementioned registered
increases of 4.3 per cent, 45.8 per cent and 27.4 per cent, respectively in the
first eight months of 2014 when compared to the last month of 2013. Loans to
the ‘other’ category and ‘transport, storage and communication’ increased by
2.3 per cent and 3.0 per cent respectively. Declines in loans were recorded in
the ‘construction’, ‘hotels and restaurants’, ‘wholesale, retail trade and repairs’
and ‘real estate, renting and business activities’ sectors which declined by 6.1
per cent, 4.7 per cent, 3.6 per cent, and 1.1 per cent, respectively.
The growth dynamics in M3 were also affected by the developments in foreign
capital from outside the Euro Area. Indeed, net claims, which represent the
external counterpart of M3 decreased substantially by 16.3 per cent during the
Economic Survey November 2014
151
Credit to Other Residents(1)
Loans by Economic Activity
Table 8.7
Total Credit
Total Loans(2)
Electricity, gas & water supply
Transport, storage & communication
Manufacturing
Construction
Hotels & restaurants
Wholesale & retail trade; repairs
Real estate, renting & business activities
Households & individuals
Other(3)
2011
(Dec)
2012
(Dec)
2013
(Dec)
2014*
(Aug)
Aug-14 Dec-13
% Change
8,550.5
8,704.1
8,666.2
8,973.1
3.5
8,440.6
539.8
526.5
280.8
1,092.7
459.8
847.9
396.6
3,589.8
8,568.6
280.1
502.0
308.8
1,024.0
468.2
829.9
423.4
3,776.8
8,544.6
293.1
478.0
297.3
894.7
462.5
782.2
455.4
3,959.4
8,857.3
427.2
492.5
378.9
840.1
440.6
754.0
450.2
4,130.1
3.7
45.8
3.0
27.4
-6.1
-4.7
-3.6
-1.1
4.3
706.7
955.4
922.1
943.7
2.3
* Provisional
(1)
Credit to other residents consists mainly of loans and holdings of securities, including equities, issued by the non-bank private sector
and public non-financial companies, and financial derivatives. Interbank claims are excluded. Data only include credit to residents of
Malta.
(2)
Data presented in this Table is compiled in accordance with NACE Rev2
(3)
Includes agriculture, mining & quarrying, public administration, education, health & social work, community recreation & personal
activities, extra-territorial organisations & bodies and non-bank financial institutions.
Source: Central Bank of Malta
first eight months of 2014 when compared to December 2013, thus reaching
€8,003.7 million in August 2014. The decline in net claims on non-residents of
the Euro Area was offset by the decline in the other counterparts net balance
which declined by 13.6 per cent during January-August 2014 over December
2013, reaching €10,693.5 million. The decline in the net claims component
reflects a more rapid decline in resident credit institutions’ liabilities to
other Euro Area banks with respect to their claims on them while the other
counterparts’ component mainly reflects interbank transactions across the Euro
Area and has a negative contribution to M3.
The Money Market
The ECB has taken unprecedented action over recent years to restore economic
and financial stability, following the onset of the global financial crisis in
2007, while at the same time targeting its price stability objective. During the
initial phases of the crisis, the ECB provided liquidity to the banking sector
and continued to use conventional monetary policy tools such as reductions
152
Economic Survey November 2014
in interest rates as the financial turmoil continued to intensify. Subsequently,
however, conventional monetary policy was complemented by additional nonstandard measures (particularly through the Securities Market Programme)
which supported the transmission mechanism of monetary policy. As the crisis
unfolded, the ECB continued to play an important role in sustaining financial
intermediation within the Euro Area while safeguarding the refinancing tools
of solvent banks and helping restore confidence in financial markets.
Following the appointment of Mario Draghi as ECB President, the ECB issued
its Long-Term Refinancing Operation (LTRO) with an unprecedented term of
three years and 1.00 per cent interest rate. Government securities, mortgagebacked securities and commercial paper were allowed as collateral. This was
followed in February by LTRO providing Eurozone banks with cheap loans with
a view to ensure enough liquidity in the banking system. The ECB’s Governing
Council decided that the interest rate on the main refinancing operations and
the interest rates on the marginal lending facility and deposit facility should
remain unchanged at 1.00 per cent, 1.75 per cent and 0.25 per cent respectively.
By mid-2012, the ECB decided on the details relating to the tender procedures
as well as the modalities to be applied in its refinancing operations up to 15
January 2013, in particular to continue its fixed rate tender procedures with full
allotment. The ECB’s Governing Council also decided to decrease the interest
rate on the main refinancing operations by 25 basis points to 0.75 per cent and to
decrease the interest rates on both the marginal lending facility and the deposit
facility by 25 basis points, to 1.50 per cent and 0.00 per cent, respectively. It is
notable that all these extraordinary measures coupled with the ECB President’s
announcement that “the ECB would do whatever it takes to preserve the Euro
…” sovereign bond yields finally started to decline even in the most troubled
economies of the Euro Area.
In September 2012, the ECB decided on additional procedures and opted to
conduct further liquidity provisioning measures. In particular, it announced
the modalities for undertaking Outright Monetary Transactions (OMTs) in
secondary markets for sovereign bonds in the Euro Area. In addition, in
December 2012, the Governing Council of the ECB also decided on the details
relating to tender procedures and modalities to be applied in its refinancing
operations up to 9 July 2013, particularly to continue its fixed rate full allotment
tender procedures.
In May 2013, a decision was taken by the Governing Council of the ECB to
decrease the interest rate on the main refinancing operations by 25 basis points
Economic Survey November 2014
153
to 0.50 per cent and to also decrease the interest rate on the marginal lending
facility by 50 basis points to 1.00 per cent. At the same time, it was also decided
to keep the interest rate on the deposit facility unchanged at 0.00 per cent.
During the same meeting the Governing Council also decided to continue its
fixed rate tender procedure with full allotment for its refinancing operations
up to 8 July 2014.
The ECB continued to reduce key interest rates in November 2013, notably
the rate on the main refinancing operations as well as the rate on the marginal
lending facility which were both decreased by 25 basis points to reach 0.25
per cent and 0.75 per cent, respectively. At the same time, a decision was also
taken to continue the fixed rate tender procedure refinancing operations with
full allotment up to the 7 July 2015.
As of mid-2014, the ECB continued its pro-active stance and reduced further its
main interest rates, resulting in rates of 0.15 per cent and 0.40 per cent for rates
relating to the main refinancing operations and the marginal lending facility
respectively, whilst for the first time set a negative interest rate of -0.10 per
cent on its deposit facility.
The pick-up in non-standard measures adopted by the ECB in the second half
of 2014 was aimed at augmenting the banking sector’s access to liquidity
and consequently to support the functioning of the Euro Area money market
and to prolong the provision of credit to households as well as non-financial
corporations. With this intention, in addition to a series of Refinancing
Operations, the ECB also suspended the weekly fine-tuning operation sterilising
the liquidity injected under the Securities Markets Programme and intensified
the preparatory work related to outright purchases in the Asset Backed Securities
(ABS) market. In September of this year, the ECB also cut further its main
interest rates, resulting in an interest rate on main refinancing operations of 0.05
per cent, a rate on marginal lending of 0.30 per cent and a rate on the deposit
facility of -0.20 per cent. Moreover, the ECB also decided to purchase a broad
portfolio of simple and transparent ABSs with underlying assets consisting of
claims against the Euro Area non-financial private sector under an ABS purchase
programme and to purchase a broad portfolio of euro-denominated covered
bonds issued by MFIs domiciled in the Euro Area under a new covered bond
purchase programme. Interventions under both of these programmes started
in October 2014.
Interbank rates are considered as an indicator of risk aversion in financial
markets. Lending institutions would be less willing to provide credit to each
154
Economic Survey November 2014
other in the interbank market during periods of heightened risk aversion. During
the first half of 2010, interbank rates remained relatively stable. However, in
the following twelve months, some volatility was experienced in interbank
rates which increased up to around mid-2011, signalling renewed tensions and
intensified risk aversion levels in financial markets. Interbank rates broadly
reached their peak towards mid-2011. Following this period, however, overnight
rates declined steadily and reached 0.07 per cent in December 2012, remaining
relatively stable until November 2013 following which, the overnight rate
edged up to 0.25 towards May 2014 before it bottomed out at 0.02 per cent in
August 2014. Long-term rates remained higher compared to their shorter-term
counterparts in the same comparable period, albeit continuing to decline steadily
reaching 0.47 per cent in August 2014.
Euro Area interbank money market interest rates have a bearing on Maltese
Treasury Bills, as they represent an alternative portfolio investment opportunity
to the local investors. In the first nine months of 2014, the local Government
issued €682.4 million worth of Treasury Bills on the primary market. This level
is €136.6 million less than the level of Treasury Bills that were issued during
the same period in 2013. Yields in the primary and secondary markets for Malta
Treasury Bills have been on a declining trend since the third quarter of 2012.
In fact, as at August 2014, the yield on three-month bills in the primary market
stood at 0.21 per cent whilst the yield on six-month bills stood at 0.29 per cent
when compared to rates registered in September 2012 of 1.27 per cent and 1.36
per cent for three-month bills and six-month bills respectively.
The turnover in the secondary market for Treasury Bills reached €10.1 million
during January-September 2014, representing an increase of €0.9 million when
compared to a turnover of €9.2 million recorded in the comparable period of
2013.
Deposit and Lending Rates
Chart 8.5 portrays the local developments in relation to deposit and lending
rates, in conjunction with the interest margin between their weighted averages,
as well as the minimum bid rate of the ECB. As from 2011 onwards, the spread
declined very marginally remaining largely stable, despite the decline in the ECB
minimum bid rate which decreased steadily from 1.5 per cent in July 2011 to
0.15 per cent in the period June-August 2014. As at the end of August 2014, the
spread stood at 2.90 per cent when compared to 2.99 per cent in January 2011.
Economic Survey November 2014
155
Chart 8.5
Local Interest Rates and Margins
percentage points
5.0
4.0
3.0
2.0
1.0
Spread - Interest margin
Weighted average deposit rate
Weighted average lending rate
Non-financial companies lending rate
Households and individuals lending rate
ECB minimum bid rate
Jul-14
Mar-14
May-14
Jan-14
Nov-13
Sep-13
Jul-13
May-13
Jan-13
Mar-13
Sep-12
Nov-12
Jul-12
May-12
Jan-12
Mar-12
Sep-11
Nov-11
Jul-11
Mar-11
May-11
Jan-11
0.0
The Capital Market
In the first nine months of 2014, the Government issued €575.0 million worth
of stocks on the primary market. In addition, stocks worth €635.0 million were
re-integrated into other issued stock during the period reviewed while total
redeemed stocks amounted to €263.4 million.
A strong increase in the primary corporate bond market was experienced
between January and September 2014 when compared to the same period a
year earlier. Indeed, newly issued corporate bonds increased by €198.2 million
when compared to the same period of last year, reaching €208.0 million as at
September 2014. In addition, redeemed corporate bonds reached €38.0 million in
the first nine months of 2014, representing an increase of €9.2 million compared
to the same period in 2013. These developments were also accompanied by
lower deductions which stood at €1.0 million as at September 2014 when
compared to €12.8 million during the same period in 2013.
Table 8.8 illustrates the activities in Government stock in the secondary market.
Trading activity in the secondary market for Government bonds was strong
between January-September 2014, with turnover levels increasing by 30.3 per
cent when compared to the same period a year earlier, to reach €678.0 million.
The number of deals also saw a similar increase during the same period. Indeed,
the number of deals during the first nine months of 2014 reached 6,841 from
156
Economic Survey November 2014
Government Stocks
Activity on the Secondary Market
Table 8.8
2014
Jan-Mar
2014
Apr-Jun
2014
Jul-Sep
2014
Jan-Sep
Nominal Value (€ million)
187.5
201.7
226.1
615.4
Market Value (€ million)
202.6
219.7
255.7
678.0
Number of Transactions
1,754
2,236
2,851
6,841
106,911
90,218
79,310
89,952
Amount sold by CBM (€ million)**
83.5
89.1
91.8
264.4
Amount bought by CBM (€ million)**
101.0
100.0
88.7
289.6
Turnover in Government Stocks:
Average Value per Transaction (€)*
* Based on Nominal Values
** Based on Market Values
Source: Central Bank of Malta
5,388 recorded in January-September 2013, representing an increase of 27.0 per
cent. In the period January-September 2014, trading was mainly concentrated
in two issues: 4.5 per cent MGS 2028 and 4.45 per cent MGS 2032, registering
1,421 and 877 deals, respectively. The value transacted by the Central Bank
of Malta in the local secondary Government bond market amounted to €554.0
million during the first nine months of 2014.
A range of secondary market indicators is presented in Table 8.9. Between
January-September 2014, corporate bonds turnover in the secondary market
increased by 16.5 per cent to reach €28.5 million, from €24.5 million recorded
during the same comparable period in 2013. As at September 2014, the total
listing of corporate bonds stood at 44, which remained unchanged from the
level of listings registered a year earlier.
Similarly to corporate bond developments, aggregate turnover for equities
increased to €38.5 million in the first nine months of 2014, compared to a
level of €37.7 million registered in the comparable period of 2013. Between
January-September 2014, Bank of Valletta p.l.c. and HSBC Bank Malta p.l.c.
share issues registered the largest level of trading activity standing at 2,596
Economic Survey November 2014
157
Selected Indicators of the Capital Market
Table 8.9
2014
Jan-Mar
2014
Apr-Jun
2014
Jul-Sep
2014
Jan-Sep
Corporate Bonds*
Number of Listings**
Turnover (€ million)
40.0
44.0
44.0
44.0
6.7
9.6
12.2
28.5
Equities*
Number of Issues Outstanding**
Turnover (€ million)
24.0
23.0
24.0
24.0
14.8
11.0
12.7
38.5
Total Listed Securities*
Total Turnover (€ million)***
Market Capitalisation (€ million)**/***
MSE Ord. Share Index**
224.2
249.6
281.6
755.4
9,535.3
9,879.0
10,139.2
10,139.2
3,424.0
3,297.6
3,333.2
3,333.2
*Including the Alternative Companies listing
**As at end of period
***Including Malta Government Stocks and Treasury Bills
Source: Malta Stock Exchange
and 1,220 deals, respectively.
As at September 2014, the Malta Stock Exchange Share Index closed at 3,333.2
reflecting a decline of 2.5 per cent over the same period in 2013. Market
capitalisation in the equity market decreased from €3,016.4 million in September
2013 to €3,003.8 million at the end of September 2014.
As at September 2014, total market capitalisation stood at €10,139.2 million,
increasing by €676.7 million from the level of €9,462.5 prevailing in the same
month last year. This increase was underpinned mainly by increases in the
market capitalisation for Government bonds and to a lesser extent an increase
in market capitalisation for corporate bonds. Contrary to these developments,
during the same period, a decline was registered in market capitalisation for
treasury bills and for equities.
158
Economic Survey November 2014
Exchange Rate Developments
Movements in exchange rates have a direct impact on firms and consumers
since the exchange rate is one of the key relative prices for an economy having
a bearing on both the real, as well as the financial sectors of an economy.
Indeed, the exchange rate has economy-wide implications influencing price
competitiveness, international trade flows as well as impacting the real return
of investors’ portfolios. Exchange rates are also sensitive to developments in
monetary policy.
Chart 8.6 outlines an indexed Euro exchange rate against the three major
currencies, namely the US Dollar, the UK Sterling and the Japanese Yen since
the end of 2011. Since mid-2011, as the Euro debt crisis intensified, the Euro
registered declines with respect to the major currencies under analysis. This is
somewhat in contrast with the first two years of the financial crisis, where the
Euro currency retained a degree of strength in respect of the major currencies,
especially in respect of the US Dollar, mainly due to the significant easing of
monetary policy in the US. Following these periods, the Euro depreciation
continued throughout the first half of 2012 before subsequently registering
diverging dynamics in terms of appreciations vis-à-vis the Japanese Yen and a
relatively more stable performance with respect to the US Dollar and the UK
Sterling until the first nine months of 2014.
Chart 8.6
Euro Exchange Rate Movements
(Index of End of Month Rates, End 2011=100)
150.00
145.00
Japanese Yen
140.00
135.00
130.00
125.00
120.00
115.00
110.00
105.00
US Dollar
100.00
95.00
90.00
UK Sterling
85.00
80.00
75.00
70.00
65.00
D
M
J
S
2012
Economic Survey November 2014
D
M
J
2013
S
D
M
J
S
D
2014
159
Throughout 2013 until April 2014 the Euro reached US$1.39 but depreciated
thereafter vis-à-vis the US Dollar reaching US$ 1.26 in September 2014. The
depreciation in the Euro currency experienced during this period primarily
reflected the weaker than expected economic activity of a number of Euro Area
Member States and a stronger than anticipated recovery in the USA. At the end
of September 2014, the Euro/US exchange rate was around 6.8 per cent lower
than the level prevailing a year earlier. From a longer-term perspective, at the
end of September 2014, the Euro was trading at 6.1 per cent below its 10-year
average level of US$ 1.34.
During the period under review, the largest decline in the Euro’s strength was
registered in respect of the UK Sterling. Whilst the value of the Euro vis-àvis the Sterling somewhat stabilised into the first half of 2013, it depreciated
throughout the second half of the year (in July 2013, the Euro stood at GBP 0.87
when compared to the level of GBP 0.78 registered in July 2012) and continued
following this trend until September 2014, where the Euro was trading at around
GBP 0.78. This meant that as at September 2014, the Euro depreciated by around
7.0 per cent from the level prevailing in the same comparable month in 2013.
Nevertheless, from a longer-term perspective, this is largely in line with the
average Euro-UK Sterling bilateral exchange rate for the past 10 years which
stands at GBP 0.79.
As illustrated in Chart 8.6, the Euro experienced a high degree of volatility
in respect of the Japanese Yen during recent years which was predominantly
marked by an upward trend in the value of the former vis-à-vis the latter. During
the first quarter of 2012, the Euro appreciated and stood at JPY 109.56 in March
2012. These developments reversed almost immediately as the Euro depreciated
to reach JPY 96.03 in July 2012. Subsequently, however, the Euro experienced
a strong positive trend which persisted up to December 2013 reaching a high
of JPY 144.72, effectively reflecting the new regime of monetary policy easing
introduced by the Bank of Japan. This exchange rate stabilised somewhat in
the following months and at September 2014 the Euro traded at JPY 138.11
which was 4.8 per cent higher than the value in the corresponding month of
the previous year. From a longer-term perspective, the Euro is currently trading
notably above the 10-year average mark of JPY 132.56.
160
Economic Survey November 2014
Footnotes:
1
The statistics for Public Finance contained in this Chapter go beyond the cut-off date.
2
Data for Japan and the United States follow the ESA95 classification.
3
Along with Spain, Portugal exited the Programme in June 2014. Ireland is now following post
programme surveillance, leaving only Cyprus and Greece undergoing a programme of fiscal
and economic adjustment.
Economic Survey November 2014
161
Government Revenue
(January-September)
Appendix Table 8.1
€ thousand
2011
Tax Revenue
Direct Tax Revenue
Income Tax
Social Security
Indirect Tax Revenue
Customs and Excise Duties
Licences, Taxes and Fines
Value Added Tax
Non-Tax Revenue
Fees of Office
Reimbursements
Rents
Dividends on Investments
Repayment of Government Loans
and interest
Miscellaneous Receipts
Public Corporations
Central Bank of Malta
Grants
Recurrent Revenue
Extraordinary Receipts
Loans
Repayment of Loans made by Government
Total Revenue
2012
2013
2014
1,608,700 1,685,952 1,831,532 1,950,242
918,436 1,007,863 1,125,193 1,208,477
518,449
595,133
683,236
728,948
399,987
412,731
441,957
479,529
690,264
678,089
706,339
741,765
147,637
117,823
141,578
111,822
170,747
171,946
160,744
175,911
371,880
388,320
404,017
454,031
213,430
27,832
15,375
18,206
10,699
235,467
23,859
19,794
18,554
13,251
224,713
24,959
17,108
18,981
10,914
277,076
29,923
17,748
22,614
5,118
1,168
33,095
0
48,000
59,056
570
53,907
0
42,000
63,531
1,408
15,593
0
42,000
93,751
1,120
20,962
0
44,000
135,592
1,822,130 1,921,419 2,056,245 2,227,318
9,622
401,610
0
28,425
510,582
0
0
449,321
30
0
573,841
0
2,233,362 2,460,425 2,505,596 2,801,160
Source: The Treasury, Ministry for Finance
162
Economic Survey November 2014
Government Recurrent Expenditure
(January-September)
Appendix Table 8.2
€ thousand
2011
2012
2013
2014
Office of the President
House of Representatives
Office of the Ombudsman
National Audit Office
Office of the Prime Minister
Public Service Commission
Armed Forces of Malta
Tourism [Ministry for Tourism and Culture]
Local Government
Information
Government Printing Press
Electoral Office
1,689
2,215
328
1,600
20,337
289
27,945
31,091
25,891
947
833
3,997
1,629
2,297
550
1,638
22,417
307
26,426
32,809
34,630
923
939
4,142
1,603
1,963
700
1,780
12,979
341
27,111
38,611
27,742
908
930
7,518
1,958
2,325
700
2,180
19,971
331
28,064
46,771
36,082
802
934
6,507
Ministry of Foreign Affairs
Ministry for Gozo
16,032
40,509
17,454
41,185
13,900
17,174
14,345
18,970
Ministry for Infrastructure, Transport and Communication
Land and Public Registry Division
Ministry for Resources and [Infrastructure] Rural Affairs
Ministry of Education, [Culture, Youth and Sport] Employment and the Family
Education
Libraries and Archives
Social Security
Social Security Benefits
Social Welfare Standards
Ministry of Health, the Elderly & Community Care [Health]
Elderly and Community Care
Industrial and Employment Relations
Ministry of Finance, the Economy and Investment
Treasury
Pensions
Inland Revenue
30,133
1,747
60,905
27,964
2,638
59,160
0
2,902
0
0
3,264
0
148,865
103,482
1,044
126,266
525,245
634
222,414
35,763
795
80,303
3,606
65,362
5,037
149,841
110,351
131,889
561,164
626
249,345
37,703
849
115,274
3,772
68,321
5,145
128,984
126,576
141,715
623,651
686
276,117
47,824
878
0
3,031
66,007
5,167
149,262
135,774
152,359
638,575
675
300,026
55,360
863
0
3,362
69,392
5,303
Economic Survey November 2014
163
Government Recurrent Expenditure
(January-September)
Appendix Table 8.2 continued
Customs
V.A.T.
Contracts
Economic Policy
Government Property Division
Commerce
Consumer and Competition
Ministry for Justice and Home Affairs
Judicial
Police
Correctional Services
Civil Protection
Probation and Parole
Ministry for Energy and the Conservation of Water
Ministry for European Affairs and Implementation of the Electoral Manifesto
Ministry for Sustainable Development, the Environment and Climate change
Ministry for Social Dialogue, Consumer Affairs and Civil Liberties
Ministry for the Economy, Investment and Small Business
Ministry for the Family and Social Solidarity
Ministry for Home Affairs and National Security
Ministry for Finance
Ministry for Transport and Infrastructure
Recurrent Expenditure
€ thousand
2011
2012
2013
2014
7,321
4,174
830
709
3,467
1,144
1,229
14,357
7,338
32,447
6,622
2,721
-
7,310
4,190
824
742
2,871
1,124
12,826
8,157
33,094
6,284
3,030
403
7,309
4,322
757
704
6,465
1,056
0
9,058
36,749
6,529
2,912
587
30,529
5,247
34,398
6,543
19,881
26,427
17,130
77,942
34,163
8,108
4,009
873
833
5,848
1,154
0
9,092
38,579
7,181
3,034
612
23,880
6,509
32,797
7,342
19,936
34,872
21,095
73,989
66,141
1,667,663
1,792,243
1,905,506
2,060,037
Note: [ ] denotes change in name of cost centres
Source: The Treasury, Ministry for Finance
164
Economic Survey November 2014
Government Capital Expenditure
(January-September)
Appendix Table 8.3
€ thousand
2011
2012
2013
2014
Productive Investment
36,696
70,172
75,834
57,393
Development of Industry
Gozo Ferries
Gozo
3,032
1,018
8,495
355
4,068
184
4,660
250
14,464
2,248
11,000
4,934
12,551
5,510
18,034
20,000
5,227
12,967
1,092
14,000
40,000
3,522
14,904
1,021
14,700
14,980
6,878
110,095
141,431
145,409
169,510
Acquisition of Property
Upgrading Works at main Touristic Areas
Roads
Integrated Health Information System
ICT
Gozo
Waste and Sewarage Treatment
Freeport
PC Leasing
Integrated Flood Relief
Jeremie Financial Engineering
Development of Industry
Other EU Funded Projects
Other
7,529
2,704
14,691
3,071
15,586
4,298
5,035
2,717
3,952
8,737
34,362
7,414
9,613
2,263
25,307
1,853
19,022
3,692
9,125
1,149
5,828
3,636
45,740
14,203
8,222
1,460
14,491
2,258
13,113
2,447
20,495
0
5,600
7,974
2,000
4,993
46,998
15,359
5,337
578
35,608
2,922
17,991
3,945
6,970
0
3,945
10,219
1,582
67,145
13,268
Social
36,648
31,762
35,427
52,303
4,921
446
5,953
1,815
1,883
7,675
9,872
4,083
5,410
1,414
1,719
2,887
1,541
7,907
6,883
4,001
11,197
1,190
0
1,010
572
7,454
6,044
7,960
14,597
541
3,690
719
1,809
11,504
14,093
5,351
183,439
243,364
256,670
279,206
EU Agriculture Fund for Rural Development, EU Agriculture Guarantee Fund and EU Fisheries Fund
Film Industry
Contribution to Treasury Clearance Fund
Equity Acquisition - Air Malta plc
Other
Infrastructure
Health
Elderly and Community Care
Waste Management
Gozo
Housing
Education
External Borders Fund
Other
Total Capital Expenditure
Source: The Treasury, Ministry for Finance
Economic Survey November 2014
165
Statistical Annex
Economic Survey November 2014
169
3.7
Infant Mortality Rate (per 1000 births)
18.0
16.2
19.6
6.3
Crude Marriage Rate (per 1000 population)
Life Expectancy (at age 65)
Males
Females
7.9
Crude Mortality Rate (per 1000 population)
79.5
77.0
82.0
9.3
Crude Birth Rate (per 1000 population)
Life Expectancy (at birth)
Males
Females
563
Source: National Statistics Office
2007
2008
2009
2010
2011
2012
2013
18.6
16.7
20.3
79.9
77.6
82.2
6.6
6.1
7.6
9.3
654
18.7
17.1
20.1
79.7
77.1
82.3
8.5
6.1
7.9
9.8
770
18.9
16.8
20.6
80.4
77.9
82.7
5.5
5.7
7.8
9.8
808
20.0
18.5
21.1
81.5
79.3
83.6
5.6
6.3
7.3
9.4
888
21.0
17.7
19.4
80.9
78.7
83.0
6.5
6.2
7.8
10.0
898
19.4
17.6
21.0
80.9
78.6
83.0
5.3
6.7
8.1
9.8
712
20.1
18.4
21.5
81.9
79.6
84.0
6.7
6.1
7.6
9.5
796
405,616 407,832 410,926 414,027 414,989 417,546 421,364 425,384
201,519 202,734 204,607 206,203 206,405 207,695 209,880 212,424
204,097 205,098 206,319 207,824 208,584 209,851 211,484 212,960
0.2%
0.5%
0.8%
0.8%
0.2%
0.6%
0.9%
1.0%
2006
Population
Natural Increase per annum
Total Population (000’s)
Males (000’s)
Females (000’s)
% Increase per annum
Table I
170
Economic Survey November 2014
2,260.7
243.0
657.6
Electricity
Total Generated (000 MWh)*
Number of Consumers (000)*
Domestic Consumption (million kwh)*
Source: National Statistics Office
*Refer to Financial Year
796.6
471.5
325.2
68
Social Security
Total Payments (€ million)
Total Contributions (€ million)
Welfare Gap (€ million)
30.5
Total annual production (million m)
Average daily consumption (000 m)
Water
8,922
8.8
86.3
686
235.4
852.6
503.4
13,291
2006
835.5
480.3
355.3
69
30.8
2,296.0
246.0
645.0
9,556
8.8
83.2
704
214.1
900.9
563.3
14,155
2007
Social Indicators
of which:
University students (All Courses)
Education
Number of teachers (000)
Number of pupils/students (000)
Quality of Life
Motor Vehicle Licences per 1000 population
Internet Subscriptions per 1000 population
Mobile Phone Subscriptions per 1000 population
Fixed Telephone Lines per 1000 population
GDP at current market prices per capita (€)
Table II
927.2
510.1
417.1
70
30.8
2,275.0
254.1
670.0
9,238
8.5
82.4
717
250.0
937.0
585.8
14,971
2008
1,027.7
526.1
501.6
68
29.2
2,167.0
265.7
443.3
9,724
9.5
83.1
719
270.4
1,023.3
598.6
14,883
2009
1,096.4
552.1
544.3
68
28.8
2,113.0
272.0
590.86
10,004
10.0
84.0
734
293.5
1,099.1
597.4
15,923
2010
1,106.7
585.6
521.1
69
29.6
2,169.0
274.2
597.6
10,188
8.6
79.0
747
308.2
1,249.6
556.1
16,562
2011
1,190.3
609.7
580.6
72
30.8
2,268.0
280.3
616.41
10,533
8.0
78.6
746
322.2
1,263.1
545.2
17,109
2012
1,264.0
645.3
618.7
73
30.5
2,216.0
285.7
608.9
10,873
8.0
78.7
763
336.2
1,308.6
543.8
17,774
2013
Economic Survey November 2014
171
Includes energy and construction
(2)
24.9
72.7
23.5
74.3
2.2
4,966.1
-183.2
22.4
75.4
2.2
5,170.0
-216.1
5,386.1
2,339.4
781.1
99.4
2,365.0
2006
21.2
76.8
2.0
5,600.7
-156.8
5,757.5
2,534.3
826.2
105.9
2,503.0
2007
22.0
76.6
1.4
6,032.6
-96.1
6,128.7
2,722.6
858.1
121.0
2,668.9
2008
20.3
78.0
1.7
5,805.4
-333.2
6,138.6
2,632.2
831.1
60.8
2,736.1
2009
20.1
78.2
1.7
6,321.3
-278.2
6,599.5
2,961.5
865.4
72.6
2,845.3
2010
Factor Incomes in Gross National Income
Source: National Statistics Office
Note: The data presented in this Table is based on national accounts data compiled according to the European Systems of Accounts (ESA 10) methodology.
Includes fishing and operation of fish hatcheries and fish farms
(1)
Industry (2)
Services Activities
Agriculture, hunting and forestry (1)
2.3
4,835.6
Gross National Income
at market prices
Sectoral Percentage Contribution to Gross Value
Added
(at basic prices)
-16.8
5,149.3
2,268.6
740.8
89.6
2,093.9
653.2
71.1
4,852.4
2,229.5
2005
2,176.5
2004
Net Income from Abroad
Gross Domestic Product
at market prices
Compensation of employees
Gross operating surplus
and mixed income
Taxes on production and imports
Subsidies
Table III
19.3
79.2
1.6
6,647.5
-246.8
6,894.4
2,995.8
927.9
65.1
3,035.8
2011
17.7
80.7
1.6
6,844.3
-334.6
7,178.9
3,116.7
943.9
92.3
3,210.6
2012
17.2
81.1
1.6
7,170.1
-340.0
7,510.1
3,274.4
990.9
95.6
3,340.3
2013
2012
2013
2014
20.1
78.3
1.5
3,100.0
-253.0
3,353.0
1,465.3
415.0
34.7
1,507.4
18.1
80.5
1.4
3,289.6
-183.8
3,473.4
1,491.3
446.9
44.9
1,580.2
17.9
80.6
1.5
3,446.1
-180.2
3,626.4
1,570.9
443.5
42.2
1,654.2
17.0
81.6
1.4
3,631.6
-159.4
3,791.0
1,597.6
496.2
50.4
1,747.5
Jan-Jun Jan-Jun Jan-Jun Jan-Jun
2011
€ million
172
Economic Survey November 2014
926.9
932.4 1,002.7
1,120.5 1,102.2 1,155.7
19.1% 18.1% 18.6%
3,063.1 3,243.8 3,419.1
3,534.2 3,634.9 3,738.4
63.1% 63.0% 63.5%
999.6 1,132.9 1,183.2
1,107.7 1,286.2 1,319.6
20.6% 22.0% 22.0%
General Government Final Consumption Expenditure
current market prices
constant prices
Ratio (%) of Government consumption to GDP at m.p.
Private Final Consumption Expenditure(1)
current market prices
constant prices
Ratio (%) of private consumption to GDP at m.p.
Gross Fixed Capital Formation
current market prices
constant prices
Ratio (%) fixed investment to GDP at m.p.
1,288.2
1,393.9
22.4%
3,485.0
3,763.2
60.5%
1,032.7
1,166.4
17.9%
4,517.7
4,932.4
78.5%
6,323.0
5,600.7
8.3%
5,757.5
6.9%
2007
2009
1,203.1 1,114.8
1,266.3 1,116.4
19.6% 18.2%
3,605.5 3,742.3
3,755.4 3,822.6
58.8% 61.0%
1,209.4 1,213.9
1,309.9 1,266.2
19.7% 19.8%
4,814.8 4,956.2
5,063.3 5,089.2
78.6% 80.7%
6,534.6 6,373.7
6,032.6 5,805.4
7.7%
-3.8%
6,128.7 6,138.6
6.4%
0.2%
2008
1,411.6
1,411.6
21.4%
3,814.9
3,814.9
57.8%
1,286.4
1,286.4
19.5%
5,101.3
5,101.3
77.3%
6,599.5
6,321.3
8.9%
6,599.5
7.5%
2010
Source: National Statistics Office
Note: The data presented in this Table is based on national accounts data compiled according to the European Systems of Accounts (ESA 10) methodology.
Including NPISH final consumption expenditure
3,990.0 4,176.1 4,421.8
4,656.7 4,740.8 4,897.1
82.2% 81.1% 82.1%
Total Final Consumption Expenditure
current market prices
constant prices
Ratio (%) of consumption to GDP at m.p.
(1)
5,753.7 5,971.4 6,080.6
2006
GDP at constant prices
2005
4,835.6 4,966.1 5,170.0
2.8%
2.7%
4.1%
4,852.4 5,149.3 5,386.1
2.0%
6.1%
4.6%
2004
Gross National Income and Expenditure
GNI at current market prices
% annual increase of GNI
GDP at current market prices
% annual increase of GDP
Table IV
2012
2013
2011
2012
2013
2014
Jan-Jun Jan-Jun Jan-Jun Jan-Jun
659.0
651.6
19.7%
708.3
689.1
20.4%
734.5
699.7
20.3%
796.8
747.2
21.0%
1,226.0 1,259.7 1,314.1
1,170.5 1,161.6 1,187.3
17.8% 17.5% 17.5%
635.2
612.4
18.9%
631.0
578.9
18.2%
647.3
585.4
17.9%
712.7
640.2
18.8%
4,003.5 4,120.2 4,237.1 1,973.8 2,019.4 2,061.7 2,110.5
3,908.9 3,927.6 3,992.6 1,931.0 1,931.2 1,941.8 1,981.3
58.1% 57.4% 56.4% 58.9% 58.1% 56.9% 55.7%
1,340.1 1,443.7 1,487.6
1,323.4 1,405.8 1,413.4
19.4% 20.1% 19.8%
5,343.5 5,563.8 5,724.7 2,632.9 2,727.7 2,796.2 2,907.3
5,232.3 5,332.8 5,405.6 2,582.6 2,620.0 2,641.1 2,727.9
77.5% 77.5% 76.2% 78.5% 78.5% 77.1% 76.7%
6,747.5 6,879.9 7,052.5 3,161.2 3,218.1 3,300.6 3,406.4
6,647.5 6,844.3 7,170.1 3,100.0 3,289.6 3,446.2 3,631.6
5.2%
3.0%
4.8%
1.0%
6.1%
4.8%
5.4%
6,894.4 7,178.9 7,510.1 3,353.0 3,473.4 3,626.4 3,791.0
4.5%
4.1%
4.6%
5.5%
3.6%
4.4%
4.5%
2011
€ million
Economic Survey November 2014
173
Source: Employment and Training Corporation
* Includes both Parts I and II of the registered unemployed
Note: Employment data has been revised
Self Employed
Registered Unemployed*
Males
Females
of which Temporary Employment
Public Sector
of which:
Government Departments
Independent Statutory Bodies
Companies with Public Sector majority s/hldg
Private Market Services
of which:
Wholesale and Retail (including Repair of Motor Vehicles, Motorcyles
and Personal and Household Goods)
Accomodation and Food Services
Financial and Insurance Activities
Others
17,620
7,335
5,652
1,683
17,747
7,055
5,542
1,513
627
29,938
8,513
2,156
30,030
8,532
2,235
673
40,607
22,664
9,498
5,945
36,960
22,329
9,718
5,801
35,270
40,797
75,067
8,809
19,800
2,634
9,429
19,514
2,666
73,118
31,243
146,917
98,617
48,300
153,972
2010
31,609
145,524
98,686
46,838
Private Direct Production
of which:
Construction
Manufacturing
Others
152,859
2009
Gainfully Occupied
Males
Females
Labour
Labour Supply
Table V
17,705
6,570
5,179
1,391
658
30,328
8,628
2,067
41,023
22,810
9,574
6,218
38,710
77,312
8,614
20,258
2,592
31,464
149,799
99,284
50,515
156,369
2011
17,891
6,839
5,303
1,536
604
30,286
8,756
1,851
40,893
23,063
9,800
6,400
40,873
80,136
8,724
20,002
2,551
31,277
152,306
99,791
52,515
159,145
2012
18,147
7,382
5,626
1,756
558
31,294
8,793
1,831
41,918
23,344
9,908
6,708
43,897
83,857
8,656
20,088
2,542
31,286
157,061
101,373
55,688
164,443
2013
17,864
6,698
5,237
1,461
614
30,287
8,762
1,823
40,872
22,989
9,782
6,358
40,487
79,616
8,874
20,025
2,558
31,457
151,945
99,782
52,163
158,643
2012
May
18,135
7,292
5,585
1,707
553
31,181
8,735
1,842
41,758
23,188
9,849
6,862
43,528
83,427
8,859
20,140
2,540
31,539
156,724
101,325
55,399
164,016
2013
May
18,643
7,141
5,441
1,700
519
31,985
8,992
2,602
43,579
23,770
10,094
7,193
45,669
86,726
9,014
20,277
2,560
31,851
162,156
103,844
58,312
169,297
2014
May
174
Economic Survey November 2014
998.5
9,441
6.7
250.4
Expenditure from Inbound Tourism (€ million)(3)
Total Sector Employment in Hotels and Restaurants
% of Gainfully Occupied
Outbound Tourists (000’s)
0.0
Expenditure data is not comparable with the same data in previous issues of the Economic Survey since as from this Survey, the source of expenditure data is the Tourstat Survey.
Data shows average for January-May.
Data for January-June period.
(5)
0.0
0.9
32.1
7.6
0.0
13.6
31.8
13.2
0.9
11,860
331.1
9,800
6.4
1,326.5
555.7
441.3
202.2
137.5
17.2
97.4
547.9
1,443.4
2012
0.0
1.0
33.1
6.9
0.0
12.6
31.3
14.4
0.7
12,890
363.5
9,908
6.3
1,440.4
424.6
454.7
233.8
147.1
34.6
105.1
606.9
1,582.2
2013
149.8(5)
135.5(5)
0.0
0.9
31.8
8.1
0.0
13.6
31.3
13.4
1.0
0.0
1.0
32.7
7.3
0.0
12.3
31.4
14.5
0.8
8,835
9,894(4)
6.3(4)
9,767(4)
6.4(4)
8,092
986.5
305.1(2)
304.1
163.8
93.3
20.0
70.4
415.6
1,067.2
2013
Jan-Aug
901.8
424.7(2)
289.8
143.5
88.1
10.5
68.4
381.2
981.5
2012
Jan-Aug
0.0
1.0
34.3
2.5
0.0
11.8
30.8
18.2
1.3
9,264
160.5(5)
9,962(4)
6.2(4)
1,050.6
313.2(2)
327.7
184.0
88.2
27.5
76.6
453.2
1,157.2
2014
Jan-Aug
Source: National Statistics Office, Employment & Training Corporation
The Malta Tourism Authority (MTA) licensing department reclassified all collective accommodation establishments registered as aparthotels to hotels (refer to Legal Notice 351, 2012). These changes were taken on board from January 2013, whereas previously it was added to the 'Aparthotels' category.
0.0
0.6
30.3
6.8
0.0
15.3
33.0
12.9
1.1
11,241
308.5
9,612
6.4
1,221.3
493.2
438.8
201.8
134.3
6.3
93.8
540.1
Data for January-September period.
(6)
2011
1,415.0
(4)
0.0
0.8
31.3
6.9
0.0
14.2
32.9
13.0
1.0
11,148
294.3
9,571
6.5
1,132.0
467.9
415.1
219.7
126.2
15.9
92.9
469.1
1,338.8
2010
Excluding embarkations and Maltese cruise passengers.
0.0
0.6
31.4
7.0
0.0
16.4
31.2
12.0
1.4
9,949
264.5
9,789
6.7
924.9
415.5
398.5
161.7
127.4
14.3
66.8
413.8
1,182.5
2009
(3)
0.0
1.0
28.7
7.2
0.0
14.1
33.4
13.1
2.4
10,962
261.0
10,211
7.0
1,069.4
532.3
454.4
144.5
150.8
9.4
85.5
446.3
1,290.9
2008
(2)
0.0
0.5
27.6
7.0
0.0
14.0
33.5
15.3
2.1
11,017
229.0
9,638
6.9
1,061.1
473.7
482.4
113.7
130.0
9.3
87.3
420.9
1,243.5
2007
Tourism
(1)
0.0
0.5
27.2
6.7
1 star
Unclassified
Guest Houses
Flats/Private Residences
Tourist Village/Aparthotels/Hostels/Holiday Complex/Camp Sites/Bed & Breakfast(6)
11.8
35.3
16.6
1.9
5 star
4 star
3 star
2 star
10,661
389.0
Cruise Passengers (000’s)(1)
Days Stayed / Nights Spent (000's)
% of which spent in :
431.3
112.5
125.8
9.2
73.7
371.7
1,124.2
2006
United Kingdom
Italy
Germany
Libya
Scandinavian Countries
Other
Inbound Tourists
of which from:
Table VI
Economic Survey November 2014
175
2007
2008
2009
2010
2011
2012
2013
2012
2013
2014
Jan-Aug Jan-Aug Jan-Aug
€ million
655.0 635.8 610.2 710.3
838.9
875.9
811.0
868.3
659.7
605.6
678.5
2,499.9 2,597.4 2,455.8 2,087.4 2,809.3 3,819.0 4,438.6 3,925.2 2,934.4 2,573.5 2,486.8
3,537.1 3,603.9 3,897.2 3,475.2 4,330.3 5,339.4 6,187.5 5,683.1 4,348.7 3,963.4 4,005.6
953.9 1,024.7 1,158.9 1,057.8 1,199.6 1,464.1 1,720.3 1,593.6 1,165.3 1,080.0 1,123.0
1,928.2 1,943.4 2,128.0 1,707.2 2,291.8 2,999.4 3,656.2 3,221.2 2,523.6 2,277.8 2,204.1
2006
Foreign Trade
Source: National Statistics Office
457.5
165.4
290.5
306.8
420.1
271.3
241.4
279.7
29.3
121.3
597.2
719.9
405.9
326.7
218.2
298.8
50.3
120.5
635.0
631.4
597.8
713.9
128.5
132.4
132.9
209.5
381.4
237.3
267.6
270.4
902.7 1,027.5
90.8
114.6
499.6
222.1
263.2
283.0
1,015.2
85.6
344.5
213.2
359.7
131.4
362.6
150.4
372.6
124.6
308.4
107.8
268.3
78.5
208.2
72.0
457.7
528.1
72.4
137.2
229.5
185.3
338.9
187.4
272.4
222.0
35.8
234.3
353.5
226.7
376.1
244.9
317.6
326.2
197.2
776.8
278.9
255.4
369.1
296.9
319.9
358.3
256.4
617.3
387.9
224.7
285.6
253.0
321.0
348.6
611.7
641.9
769.9
827.6
686.5 1,092.1 1,020.4 1,059.6
151.5
182.7
276.9
228.8
338.5
238.6
295.2
281.6
547.1
598.6
88.0
449.3
206.0
177.7
239.6
196.9
225.0
255.6
582.7
692.3
216.9
390.0
183.9
154.0
200.7
166.3
219.6
229.7
861.3 1,066.2 1,445.9 1,987.2 1,406.1 1,398.6 1,041.0
105.2
157.6
171.2
174.2
154.1
105.7
80.1
380.3
100.5
458.8
466.9
188.2
697.0
457.2
156.6
145.1
122.2
217.2
216.0
731.1
97.1
204.0
62.6
3,537.1 2,591.6 2,755.8 2,425.8 2,716.6 3,357.5 3,950.1 3,288.9 2,771.4 2,311.7 2,019.0
1,154.9 1,108.8 954.2 820.7 1,149.1 1,301.9 1,295.8 1,245.8
859.0
824.6
714.9
* Based on Jan-Jun GDP and Trade data
EU
Imports
Exports
United Kingdom
Imports
Exports
Italy
Imports
Exports
Germany
Imports
Exports
France
Imports
Exports
America
Imports
Exports
Africa
Imports
Exports
Asia
Imports
Exports
Selected Groupings
of which manufactures 2,419.3 2,481.7 2,350.7 2,065.5 2,729.4 3,745.6 4,334.6 3,809.7 2,911.1 2,542.5 2,459.3
Trade Gap
-1,037.2 -1,006.5 -1,441.4 -1,387.8 -1,520.9 -1,520.4 -1,748.9 -1,757.8 -1,414.3 -1,389.9 -1,518.8
as % of GDP at
5,386.0 5,757.0 6,129.0 6,139.0 6,600.0 6,894.0 7,179.0 7,510.0 3473.4* 3626.4* 3791.0*
current market prices
Imports and Exports
Imports (c.i.f.)
Consumer goods
Industrial supplies
Capital goods and
others
Total Exports (f.o.b.)
Table VII
176
Economic Survey November 2014
74.4
-22.9
128.9
22.7
398.2
81.6
-17.5%
20.5%
-3.9%
0.3%
261.1
909.8
135.3
-15.4%
22.3%
-4.9%
3.6%
-521.1
130.1
-14.6%
21.3%
-5.4%
3.2%
241.5
147.3
177.6
-30.3
477.8
44.7
-16.7%
20.4%
-5.4%
-0.2%
-5.9
51.0
62.6
-11.6
-187.0
-2.5
-184.5
709.1
-0.8
261.3
448.6
-579.1
2,220.4
1,641.3
-821.2
45.2
-14.8%
18.9%
-7.1%
-0.6%
-23.1
85.3
100.9
-15.6
-257.2
-1.1
-256.0
684.0
-34.2
280.9
437.2
-535.2
1,927.6
1,392.4
For Balance of Payments purposes, both imports and exports are taken at f.o.b. thus the trade balance is different from that shown under Table VII
The Financial Account-Net in this Table includes Reserve Assets but does not include Errors and Omissions.
(2)
Source: National Statistics Office
Note: The balance of payments is being presented in accordance with the sixth edition of the IMF’s Balance of Payments Manual.
As from 1 January 2008, following Malta’s entry into the Euro Area, a reclassification of the external reserves of the country has been carried out. Indeed,
this meant that, as from this date, all cross-border claims that Malta has within the Euro Area as well as all claims that the country has in Euro-denomination
are no longer considered as being part of Malta’s reserve assets. In addition, as happened in other Euro Area Member States, Malta has transferred a
fraction of its external reserves to the European Central Bank (ECB) in exchange for a claim on the ECB; which, being an intra-Eurosystem asset, is also
not considered as being part of the country’s external reserves. As a result of this, the portfolio investment account, the financial derivatives account and the
other investment account recorded significant changes in their net balances.
(3)
301.8
39.7
-14.4%
19.3%
-2.9%
3.8%
144.6
66.7
76.3
-9.6
-108.3
-1.1
-107.3
730.2
-42.9
314.7
458.4
-544.0
1,815.0
1,271.0
-3,230.9 -3,103.8 -11,553.7 -8,814.8 -7,130.2 -4,257.2 -4,325.7 -1,608.1
6,227.7 4,128.9 11,484.2 9,318.7 8,903.0 4,235.3 5,103.3 7,279.4
288.1
-262.6
-246.7
-438.5
-99.8
-64.0
-166.8
205.5
-4,312.8
-945.5
767.2
722.9 -2,155.3
419.3 -1,371.1 -5,998.7
160.2
160.2
-52.9
121.4
-38.8
144.4
-61.0
423.8
-867.8
-263.7
-19.0%
18.3%
-4.5%
-4.0%
118.3
140.8
-22.5
€ million
2012
2013
2014
Jan-Jun Jan-Jun Jan-Jun
(1)
Direct Investment-net
Portfolio Investment-net(3)
Financial Derivatives-net(3)
Other Investment-net(3)
Reserve Assets(3)
Financial A/C-Net(2)
Capital A/C-Net
-18.2%
17.0%
-3.8%
-3.6%
-222.8
Goods Balance(1) as % of GDP at m.p.
Invisible Balance as % of GDP at m.p.
Income a/c Balance as % of GDP at m.p.
Current a/c Balance as % of GDP at m.p.
86.6
110.0
-23.3
-406.1
-1.5
-404.5
1,598.3
-44.8
768.4
874.7
Current A/C-Net
76.8
89.7
-13.0
-351.0
-4.6
-346.4
1,602.2
-24.0
723.4
902.7
89.4
107.2
-17.8
-267.2
1.4
-268.6
1,411.1
-44.8
672.1
783.9
Secondary Income-Net
General Government-net
Private-net
-300.2
-3.4
-296.8
1,211.0
-24.5
580.4
655.1
-234.3
7.6
-241.9
2013
Primary Income- Net
Compensation of Employees-net
Investment Income-net
2012
1,038.9
86.3
432.8
519.8
2011
Services-Net
Transport-net
Travel-net
Other Services-net
2010
-1,116.9 -1,251.2 -1,207.8 -1,108.4 -1,098.1
3,116.2 3,777.7 4,052.7 4,303.5 3,951.9
1,999.3 2,526.5 2,844.9 3,195.1 2,853.8
2009
Balance of Payments
Goods Balance(1)
Imports (f.o.b.)
Exports (f.o.b.)
Table VIII
Economic Survey November 2014
177
256.2
Loans
Repayment of Loans made by Government
Source: National Statistics Office
-147.9
Public Sector Borrowing Requirement
59.6
50.8
8.9
-32.1
0.0
0.0
0.0
-175.4
Balance of recurrent revenue and total expenditure
Financed by:
Extraordinary Receipts
Receipts from sale of shares
Sinking Funds of Converted Loans
Sinking Fund Contribution & Direct Loan Repayment
Equity Acquisition
Loan Facility Agreement with the Hellenic Republic
Loan Facility Agreement with Air Malta plc
1,835.9
319.2
13.7
180.2
1,784.3
305.1
13.5
174.2
0.0
40.3
201.8
172.8
29.0
-26.7
0.0
0.0
0.0
-134.8
2,335.4
3.2
1,857.1
1,069.0
788.1
343.5
1,724.4
972.0
752.4
363.6
2,263.5
7.1
2,200.6
5.4
2006
2,088.1
10.3
2005
126.0
-115.5
14.9
0.0
14.9
-21.2
0.0
0.0
0.0
-109.1
1,896.6
257.9
11.1
179.1
2,333.6
-0.1
1,982.0
1,143.7
838.3
242.4
2,224.5
1.1
2007
285.7
-317.7
33.3
0.0
33.3
-111.4
-6.5
0.0
0.0
-233.1
2,124.1
222.1
8.8
189.0
2,535.3
8.6
2,098.3
1,246.0
852.3
203.8
2,302.1
3.5
2008
455.8
0.0
-564.2
2.8
0.0
2.8
-269.4
-0.5
0.0
0.0
-297.0
2,204.4
271.3
10.2
192.0
2,667.8
5.2
2,130.1
1,265.5
864.6
240.6
2,370.8
3.0
2009
577.7
0.0
-506.6
0.0
0.0
0.0
-207.4
-0.2
-19.8
0.0
-279.2
2,296.3
311.5
11.1
196.8
2,804.6
5.1
2,242.5
1,353.3
889.2
282.8
2,525.4
6.5
2010
Government Revenue and Expenditure
Total Government Expenditure
Increase/(Decrease) % per annum
of which:
Recurrent Expenditure
Capital Expenditure
% of Total Government Expenditure
Interest on Public Debt
Government Recurrent Revenue
Increase/(Decrease) % per annum
of which:
Tax Revenue
Direct Tax Revenue
Indirect Tax Revenue
Non-Tax Revenue
Table IX
567.8
0.0
-439.8
9.6
0.0
9.6
-141.9
-6.0
-30.8
-52.0
-218.6
2,361.3
288.7
10.1
212.5
2,862.4
2.1
2,323.4
1,361.7
961.7
320.5
2,643.8
4.7
2011
645.7
52.0
-780.6
28.4
0.0
28.4
-361.3
-33.4
0.0
-52.0
-362.3
2,488.4
363.8
11.8
225.8
3,078.0
7.5
2,393.0
1,475.6
917.3
322.8
2,715.7
2.7
2012
627.1
0.0
-642.1
28.4
0.0
28.4
-380.8
-26.5
0.0
0.0
-263.2
2,632.6
394.7
12.1
227.9
3,255.3
5.8
2,602.5
1,612.9
989.6
389.6
2,992.1
10.2
2013
401.6
0.0
-390.9
9.6
0.0
9.6
-135.0
0.0
-25.1
-52.0
-188.4
1,667.7
183.4
9.1
159.5
2,010.6
1.2
1,608.7
918.4
690.3
213.4
1,822.1
8.0
510.6
0.0
-597.9
28.4
0.0
28.4
-355.1
11.0
0.0
0.0
-282.2
1,792.2
243.4
11.0
168.0
2,203.6
9.6
1,686.0
1,007.9
678.1
235.5
1,921.4
5.4
449.3
0.0
-415.2
0.0
0.0
0.0
-155.5
11.7
0.0
0.0
-271.4
1,905.5
256.7
11.0
165.5
2,327.6
5.6
1,831.5
1,125.2
706.3
224.7
2,056.2
7.0
2011
2012
2013
Jan-Sep Jan-Sep Jan-Sep
573.8
0.0
-563.4
0.0
0.0
0.0
-293.2
13.8
0.0
0.0
-283.9
2,060.0
279.2
11.1
172.0
2,511.2
7.9
1,950.2
1,208.5
741.8
277.1
2,227.3
8.3
2014
Jan-Sep
€ million
178
Economic Survey November 2014
2,053.6
977.6
1,785.5
752.6
2,172.4
Other Counterparts to Broad Money
2,833.6
2,142.6
1,580.5
3,723.1
22.8
1,324.0
4,423.4
5,747.5
3,472.9
1,072.4
5.4
2,400.4
67.1
3,096.9
6,636.9
2.4
6,636.9
2003
3,052.9
2,027.3
1,759.7
3,786.9
1.7
1,269.7
4,793.9
6,063.7
3,682.5
1,132.1
5.6
2,550.4
70.0
3,045.2
6,797.8
2.4
6,797.8
2004
3,271.8
2,172.4
2,042.6
4,215.0
11.3
1,031.2
5,110.6
6,141.8
3,890.2
1,162.2
2.7
2,728.0
73.3
3,121.5
7,085.0
4.2
7,085.0
2005
4,059.1
2,214.9
2,590.0
4,804.9
14.0
850.1
5,855.8
6,705.9
3,859.4
1,112.9
-4.2
2,746.5
71.8
3,520.6
7,451.7
5.2
7,451.7
2006
4,349.1
2,532.9
2,667.0
5,199.9
8.2
1,023.8
6,400.6
7,424.5
3,695.4
610.2
-45.2
3,085.2
105.3
4,474.6
8,275.3
11.1
8,275.3
2007
€ million
Source: Central Bank of Malta
*
In October 2003, the definitions of the main monetary aggregates and their counterparts were revised in accordance with ECB Regulation 2001/13. Thus,
data prior to October 2003 are estimates based on this regulation.
2,146.1
3,031.2
19.4
1,256.7
4,337.3
1,192.6
4,221.1
2,538.1
5,593.8
5,413.7
Net Foreign Assets
Increase/(Decrease) % per annum
of which:
Central Bank of Malta
Other Monetary Financial Institutions
Domestic Credit
of which:
Net Claims of Central Government
Claims on other residents
3,185.2
1,017.5
4.3
2,167.5
65.0
3,229.0
2,988.4
975.8
2,012.6
61.3
2,729.8
6,479.2
12.1
5,779.4
Intermediate Money (M2)
% Increase per annum
of which:
Narrow Money (M1)
Currency in Circulation
% Increase/ (Decrease) per annum
Deposits withdrawals on demand
Deposits redeemable at notice up to 3 months
Deposits with agreed maturity up to 2 years
6,479.2
2002
5,779.4
2001
Monetary Aggregates and Their Counterparts*
Broad Money (M3)
Table X a
Economic Survey November 2014
179
Overnight deposits
10,995.6
13,279.4
Figures show the contribution of Maltese monetary financial institutions (MFIs) to the Euro Area aggregates
10,649.4
14,238.0
7,840.0
10,903.9
5,170.4
16,074.3
3,921.3
125.1
4,715.0
710.6
5.4
5,425.6
9,472.0
3.8
9,676.3
2011
15,254.6
10,169.1
10,991.2
4,612.0
15,603.3
4,166.4
153.2
5,280.1
726.5
2.2
6,006.6
10,326.3
9.0
10,517.8
2012
12,374.0
9,567.1
11,144.2
3,289.1
14,433.3
4,622.1
113.1
5,947.0
778.7
7.2
6,725.7
11,460.9
11.0
11,626.3
2013
10,693.5
8,003.7
11,685.6
3,428.9
15,114.6
4,694.3
121.2
6,674.5
808.6
3.9
7,483.2
12,298.7
7.3
12,424.7
2014*
Jan-Aug
€ million
Credit includes, besides lending, claims in the form of debt securities and shares and other equity.
Includes net interbank claims/liabilities within the MFI sector. These counterparts make a negative contribution to M3.
(5)
(6)
Source: Central Bank of Malta
Deposits with MFIs exclude interbank deposits and deposits held by central government.
(4)
and coins held by the MFI sector.
(3)
Comprises the Central Bank of Malta’s share of Euro banknotes issued by the Eurosystem, plus coins issued by the Bank on behalf of the Treasury, less holdings of issued
Euro banknotes
Euro Area and holdings by non-residents of the Euro Area.
MFIs in Malta to the Euro Area aggregate. As from December 2008 figures also include MMFs shares/units issued less holdings in such units by MMFs and credit institutions
resident in the
(2)
M3 comprises M2, repurchase agreements and debt securities with agreed maturity of up to 2 years. This does not represent holdings of M3 by residents of Malta but rather
the contribution of
(1)
* Provisional
Other counterparts (net)
8,183.3
6,646.9
7,367.8
Net claims on non-residents of the Euro Area
(6)
10,279.1
4,187.6
9,719.8
3,512.2
8,885.0
3,258.4
14,466.7
4,005.6
124.3
4,324.6
13,232.0
4,199.9
111.7
3,719.8
12,143.4
4,860.7
114.3
3,180.4
674.4
5.4
4,999.0
9,128.9
5.3
9,370.5
2010
Credit Counterpart(5)
of which:
Credit to residents of Malta
Credit to other Euro Area residents
Deposits with agreed maturity up to 2 years(4)
Deposits redeemable at notice up to 3 months(4)
(4)
639.8
-4.4
4,359.5
669.2
3,849.6
Currency issued(3)
% Increase/ (Decrease)
8,671.1
-1.7
8,824.5
8,883.3
8,861.8
2009
Intermediate Money (M2)
% Increase/ (Decrease)
of which:
Narrow Money (M1)
2008
Contribution of Resident MFIs to Euro Area Monetary Aggregates and Counterparts(1)
Broad Money (M3)(2)
Table X b