Malta's economic growth slows in second quarter of 2010

Gross domestics product rose 3.9% year-on-year in real terms in the second quarter, slower than a revised 4.2% in the first three months of the year, the National Statistics Office said. Initially, first quarter growth was reported as 3.4%.

The economy grew for the third consecutive quarter. Malta exited the recession in the fourth quarter.

Total final consumption expenditure increased 1.4%. Gross fixed capital formation grew 1.6%. Real exports and real imports also registered growth.

In May, Central Bank of Malta chief Michael Bonello said the clouded outlook for demand in Malta's trading partners and the likely spillover from the deflationary fiscal policies being adopted in many countries may risk the economy's growth outlook. According to the forecasts by the central bank, the domestic economy is expected grow 1.1% this year and 1.8% in 2011.

European Commission's spring forecast suggests 1.2% growth in 2010 for the country and 1.8% expansion next year. Bonello had pointed out that Malta's economic contraction in 2009 was much slower when compared to the whole currency bloc thanks to the resilient services activities.