Three days later, Finance Minister sees the positive in FDI figures

Malta Independent Thursday, 28 August 2014, 20:00 Last update: about 11 years ago

The Minister for Finance Prof. Edward Scicluna today noted with satisfaction official figures which confirm that foreign direct investment (FDI) inflows in productive sectors, such as manufacturing and professionals, increased by €200 million in 2013 when compared to 2012.

In a statement, three days after the NSO issued statistics that show that foreign direct investment dropped considerably, the minister said that indeed FDI figures published by the National Statistics Office on Monday 25 August confirm that foreign direct investment flows in the Maltese productive non-banking sectors turned positive in 2013 and rose to €201.8 million from a negative €11.3 million in 2012. This turnaround in FDI was significant when compared to the disappointing FDI performance between 2009 and 2012.

As reported by Bloomberg on 27 August 2014, Deutsche Bank has cut some assets at its Non Core Operations Unit by 11 percent to €48.5 billion in the first six months of this year, resulting in a drop in equity capital held in Malta to €9.6 billion in 2013 from €12.6 billion in the year-earlier period.

Despite this drop in financial flows, investment in productive sectors, which are closely linked to economic growth and employment, increased considerably during the same period. In fact, while transportation, accommodation, and real estate activities increased by €56.6 million in 2013, professional, scientific and technical inflows increased by €13.0 million in 2013 from a negative of €8.5 million in 2012.

When looking at Malta’s FDI inflows by economic activity, one can note that the majority of sectors recorded increases in inward FDI with the manufacturing sector being the largest contributor towards the turnaround in FDI inflows to Malta in 2013.

In fact in 2012, FDI inflows in the manufacturing sector decreased and turned negative by €82.0 million while in 2013 this declining trend was reversed as FDI in Malta’s manufacturing sector not only turned positive but became the largest contributor in FDI inflows, recording an increase of 90.1 million.

“This shows that the turnaround in FDI flows to Malta observed earlier in 2013 was sustained throughout the whole year,” Prof. Scicluna noted.

“The constant increase in investment in the manufacturing sector in 2013 is expected to boost the local manufacturing sector in the coming months. This in turn should result in a favourable spill-over effect on Malta’s economic growth,” Prof. Scicluna said.