Rise in foreign liabilities slows down international investment position

At the end of 2011, total foreign assets increased by €0.32 billion over 2010, while total foreign liabilities rose by €0.41 billion during the same period, resulting in an overall decline in the IIP of €0.09 billion.

The International Investment Position (IIP) statement refers to net foreign assets (NFA), which is the balance of foreign assets less foreign liabilities.

During the course of the year, Malta's foreign assets position recorded an increase of less than 1 per cent. The direct investment abroad accounted for €1.27 billion (2.8 per cent of total foreign assets); portfolio investment €17.18 billion (38.0 per cent); financial derivatives €0.30 billion (0.7 per cent); other investment €26.04 billion (57.6 per cent); and reserve assets €0.40 billion (0.9 per cent).

The increase in Malta's foreign assets was characterised mainly by a €1.64 billion increase in debt securities which, however, was partially offset by a decline of €1.42 billion in loans in the other investment account.

As at the end of last year, Malta's foreign liabilities were estimated at €44.82 billion. Direct investment in Malta accounted for €12.52 billion (27.9 per cent of the total foreign liabilities); portfolio investment €0.45 billion (1.0 per cent); financial derivatives €0.38 billion (0.9 per cent); and other investment €31.47 billion (70.2 per cent). When compared to the position prevailing at end December 2010, both trade credits and currency and deposits in the other investment account advanced by €0.10 billion and €0.34 billion respectively.

Moreover, a decline of €0.03 billion was registered in equity securities under portfolio investment.