Increase in exported services delivers €138m surplus

Provisional results for the third quarter this year indicate that Malta registered a surplus current account balance of €138.1 million, an improvement over the corresponding period a year ago when the current account recorded a debit balance of €24.8 million.

This year's positive indicator was mainly due to increases of services provided to foreigners and a significant reduction in the net imbalance in the income account.

The level of imported goods was €891.0 million against €602.6 million worth of exports. The net imbalance for the third quarter was €288.4 million, or 8.5 per cent less than the corresponding quarter a year ago. The geographical distribution of our imports indicate that Italy remains one of Malta's leading sources for imports.

The current account amelioration over the corresponding period a year ago was primarily due to the positive indicators expressed in the services account. The net surplus in this account increased by €31.8 million; in 2010 the net balance on the services account was €454.4 million. Provisional figures for the third quarter indicate that net services were worth €486.3 million. Travel services account for 63.4 per cent of this net balance.

The net outflow on the income account decreased over the course of a year. The net imbalance reported in this account for the third quarter is €61.6 million. When compared to a year ago, there was an improvement of €97.3 million. This was mainly due to a reduction in reinvested earnings by foreign direct investors, as well as to a decrease in net interest payments abroad.

In the third quarter this year, the capital account was shaped by net inflows of €27.8 million, compared to the €9.2 million recorded in the third quarter last year. In addittion, over the course of a year, the financial account balance decreased by €18.4 million. The financial account balance for the third quarter was €33.1 million in debit.

A significant rise was recorded in the level of portfolio assets abroad. In the third quarter of 2010 the level of portfolio assets was €604.6 million, whereas during the period under review the level of portfolio assets is estimated at €958.8 million.

On the other hand, the other investments account registered a net inflow of €848.3 million compared to net inflows of €535.3 million a year ago. The reserve assets of Malta during the third quarter decreased by €10.9 million.