Malta’s economy grows by 3.9% in second quarter

Malta’s economy grew by 3.9% in volume terms in the second quarter when compared to the same period last year, the National Statistics Office said.

Provisional estimates released on Monday indicate that the Gross Domestic Product (GDP) for the second quarter of 2023 amounted to €4.7 billion, registering an increase of €416.9 million when compared to the same quarter of 2022.

The NSO said during the second quarter of 2023, Gross Value Added rose by 5.2% in volume terms.

The contribution to the GVA growth rate in volume terms of service activities and industry were both positive and stood at four percentage points and 1.3 percentage points, respectively. Conversely, agriculture and fishing recorded a negative contribution of 0.1 percentage points.

The increase in service activities was mainly driven by the growth rates recorded in the following sectors: administrative and support services activities (25.4%), financial and insurance activities (15.4%) and accommodation and food service activities (21.8%).

The expenditure approach

The expenditure approach is another method used to calculate GDP and is derived by adding final consumption expenditure, gross capital formation and net exports.

Domestic demand had a negative contribution of 2.7 percentage points to the year-on-year GDP growth rate in volume terms. Conversely, the external demand registered a positive contribution of 6.6 percentage points.

In the second quarter of 2023, final consumption expenditure increased by 2.9% in volume terms. This was mainly the result of an increase in private final consumption of 5.9%. General government final consumption decreased by 3.8%.

Exports of goods and services in volume terms increased by 2.5% and imports of goods and services declined by 1.6%.

Reacting to the results, the Labour Party said they reflected a government that continues to employ an economic strategy which yields results.

Based on these results, it added, the government is now committed to continuing to implement an economic transition that emphasises quality and where the fruits of economic growth are invested in the common good.