Early indicators on the balance of payments transactions conducted by Malta with its world trading partners during the second quarter of the year show a decline in the current account deficit of Lm20.2 million, from a net negative balance of Lm47.5 million during the June 2006 quarter to one of Lm27.2 million during the corresponding period this year, the National Statistics Office reported yesterday.
Determining this amelioration in the statement was essentially a decline in the visible trade gap of Lm34.1 million, from a net deficit of Lm121.9 million during the second quarter of 2006 to one of Lm87.8 million during the relative quarter in 2007. In fact the imports bill of the country fell by Lm33.6 million, while the income from merchandise exports rose by Lm0.5 million.
Notwithstanding this, however, the current account balance recorded a series of setbacks coming primarily from unfavourable shifts registered in both the services account as well as the income account of the statement.
In fact, the net surplus in the services account worsened by Lm11.4 million, from Lm83.7 million during the June 2006 quarter to Lm72.2 million during the same quarter in 2007. On the other hand, the net deficit in the income account increased by Lm2 million, from Lm13.5 million during the second quarter of 2006 to Lm15.4 million during the relative quarter this year. Indeed, the services account was influenced by a drop in revenue as well as by a rise in outlays on a variety of services that are regularly provided to or acquired from non-residents abroad.
As regards the capital and financial part of the statement, the capital account was marked by net inflows of Lm0.6 million as against net inflows of Lm12.5 million during the June quarter last year; whereas the financial account was characterised by net outflows of Lm4.4 million as opposed to net inflows of Lm20.7 million during the relative period in 2006. Indeed, the direct investment abroad recorded net outflows of Lm3.1 million as against net outflows of Lm0.6 million during the second quarter of 2006; while the direct investment in Malta registered net inflows of Lm65.1 million as opposed to net inflows of Lm360.4 million during the June quarter last year.
As a direct outcome of all the shifts registered in the current as well as the capital and financial part of the statement, the reserve assets of the country fell by Lm33.3 million as against an increase of Lm71.1 million during the second quarter last year.
April-June 2007: Balance of payments transactions
with the EU and
extra-EU countries
Provisional estimates of the international transactions that Malta had with the European Union during the June quarter this year indicate an improvement in the current account balance of Lm17.7 million, from a net deficit of Lm108.8 million during the June 2006 quarter to one of Lm91.1 million during the period under review. This was brought about by a decline in the visible trade gap that Malta recorded with the EU of Lm21 million.
Similarly, the current account balance of Malta with the rest of the world trading countries improved by Lm2.4 million, from a net surplus of Lm61.4 million during the June 2006 quarter to one of Lm63.8 million during the quarter under review. This was determined by an improvement in the net surplus of the goods account of Lm13.2 million.