In 2005, Malta’s Gross Domestic Product (GDP) increased by Lm96.7 million to Lm1,927.1 million at current prices, an increase of 5.3 per cent over 2004, the National Statistics Office said yesterday.
In real terms, the GDP went up by 2.5 per cent to Lm1,700.8 million.
The growth rate for the first half of 2005 averaged 3.6 per cent. This went up to 6.9 per cent in the second half.
In the period under review, the Gross National Income (GNI) increased by 3.6 per cent to Lm1,869.9 million.
GDP Production Approach: Analysisby Industry
Agriculture, hunting and forestry
In nominal terms, the contribution of the Agriculture, Hunting and Forestry sector to the GDP registered an increase in value-added of Lm0.7 million, to Lm36.1 million. The sector’s contribution to the GDP amounted to 2.2 per cent during the reference period.
Compensation of employees operating within this industry went up by Lm0.4 million to Lm10.0 million. Growth within this sector was partly characterised by an increase in the value of total livestock meat production, while a decline in the value of fresh fruit and vegetables that passed through the official markets was registered.
Fishing
The value-added in the fishing sector dropped from Lm4.3 million to Lm3.9 million. The sector’s relative contribution to the GDP stood at 0.2 per cent during 2005. Compensation of employees increased by 3.9 per cent to reach Lm1.8 million from Lm1.7 million in 2004.
Mining and quarrying
The gross value-added attributable to the mining and quarrying sector reached Lm6.0 million during the period under review, an improvement of 9.3 per cent. This industry’s contribution to gross value-added stood at around 0.4 per cent. Compensation of employees increased by 4.5 per cent reaching Lm1.9 million while the industry’s operating surplus registered an increase of Lm0.4 million to reach Lm3.7 million.
Manufacturing
The manufacturing sector’s contribution to gross value-added increased from Lm282.2 million to Lm284.8 million, or 0.9 per cent, while compensation of employees went up by 2.8 per cent over 2004. Improvements were registered in the manufacture of chemicals, chemical products and man-made fibres, the manufacture of basic metals and fabricated metal products, the manufacture of machinery and equipment and the manufacture of other transport equipment.
Sub-sectors that contributed negatively to value-added included the manufacture of textile and textile products, the manufacture of leather and leather products and the manufacture of radio, television and communication equipment and apparatus. The manufacturing sector’s share of the GDP (at basic prices) declined from 17.9 per cent in 2004 to 17.3 per cent last year.
Electricity, gas and water supply
The electricity, gas and water supply sector’s contribution to the gross value-added increased from 0.7 per cent to 0.8 per cent in 2005. The gross value-added generated by this sector advanced by Lm1.1 million or 10 per cent. Output advanced by 29.2 per cent. The introduction of the 17 per cent oil surcharge on water and electricity consumption in January 2005, which was revised to 55 per cent in November 2005, contributed to this increase.
Following the introduction of the fuel surcharge, the maximum capping in water and electricity consumption costs for factories and hotels was set at Lm5,000. In November 2005 however, this capping was increased to Lm21,000. Intermediate consumption increased by 30.9 per cent, mainly as a result of increasing oil prices. Compensation of employees declined by Lm0.6 million, or 2.9 per cent, to Lm20.4 million.
Construction
In 2005, the contribution of the gross value-added by the construction industry remained practically unchanged when compared to the preceding year. The gross value-added attributable to this industry rose by Lm1.7 million during 2005, representing an improvement of 2.2 per cent when compared to 2004. During 2005, the compensation of employees registered an increase of 4.2 per cent over the previous year, while the operating surplus dropped by 1.3 per cent.
Wholesale and retail trade
Value-added generated by the wholesale and retail trade industry increased by 5.4 per cent over 2004. Compensation paid to employees working in this sector increased by 4.2 per cent over this same period. The contribution of this industry to total gross value-added at basic prices went up slightly from 11.9 per cent in 2004 to 12 per cent in 2005.
Hotels and restaurants
The gross value-added of the hotels and restaurants industry decreased by 0.2 per cent or Lm0.2 million from Lm104.9 million to Lm104.8 million over 2004. Total output generated by this industry increased marginally by 0.1 per cent or Lm0.1 million and intermediate consumption rose by 0.2 per cent or Lm0.3 million. The amount of compensation of employees edged up by 2.0 per cent or Lm1.3 million from Lm64.4 million to Lm65.7 million whereas operating surplus decreased by 6.6 per cent or Lm1.4 million over the same period in the previous year. This industry’s contribution to the total economy’s value-added at basic prices fell from 6.6 to 6.4 per cent – a drop of 0.2 percentage points.
Transport, storage and communication
The contribution of the transport, storage and communication sector to the GDP was stable at around 10 per cent. The gross value-added attributable to this industry grew by 3.0 per cent, or Lm4.9 million, from Lm159.7 million in 2004 to Lm164.6 million in 2005. Such an increase was reflected by all sub-sectors except for the telecommunications sub-sector, which registered a drop of 2.5 per cent or Lm1.5 million over 2004.
This overall increase in gross value-added reflected positively in both the industry’s compensation of employees and operating surplus, with both factor incomes registering increases of 6.0 per cent and 60.7 per cent respectively over 2004.
Financial intermediation
The financial intermediation sector contributed towards an increase in value-added of Lm16.7 million, with its share of the GDP rising from 3.6 per cent to 4.5 per cent. Value-added in the banking sector expanded by 32.6 per cent, the main reason being the introduction of the new Fisim calculation, which contributed to a 20.2 per cent increase in output over 2004. Value-added in the other sub-sectors also increased by 11.8 per cent.
Employment income within this sector rose by 6.6 per cent or Lm3.6 million following a slight increase in the employment level. In the wake of an expert mission to Malta, figures for output, intermediate consumption and gross value-added of insurance principals were revised consistently with the recommendations of Eurostat’s GNI committee.
Real estate, renting and business activities
Value-added generated by the real estate, renting and business activities sectors registered a 5.4 per cent rate of growth between 2004 and 2005. This increase in gross value-added benefited employees, via an increase in their compensation equal to 9.6 per cent over the period under review. The contribution to total value-added of this industry increased slightly from 14.2 per cent in 2004 to 14.3 per cent in 2005.
Public administration and defence; compulsory social security
During 2005, the contribution of the public administration and defence sector to the gross value-added was Lm130.3 million, or 7.9 per cent of the total for the year. The gross value-added of this sector for 2004 was Lm129.8 million. Employment earnings in government ministries and departments declined during 2005, but this was compensated for by higher actual and imputed social contributions, which are essentially represented by treasury pensions.
Education
The education industry registered an increase in value-added of 2.4 per cent over that recorded in the previous year. The government and the NPISH sectors were the driving forces behind this rate of growth in gross value-added for this industry, contributing to around 78 per cent and 11 per cent of this increase respectively. The contribution to total gross value-added at basic prices decreased from 7.4 per cent to 7.2 per cent over this period.
Health and social work
The gross value-added of the health and social work activities sector increased by 2.7 per cent, or Lm2.7 million, from Lm98.7 million to Lm101.5 million. Total output generated by this industry rose by 3.4 per cent or Lm4.4 million from Lm127.6 million to Lm132.0 million. There was an increase in intermediate consumption of 5.8 per cent to Lm30.5 million. This was due to an increase in government expenditure on pharmaceuticals. Compensation of employees rose by 2.3 per cent or Lm1.8 million to Lm79.3 million. This industry’s contribution to the total economy’s value-added fell by 0.1 percentage points to 6.2 per cent.
Other community, social and personal service activities
The value-added generated by enterprises in the other community, social and personal service activities sector increased by 13.2 per cent in 2005 over 2004. This growth is mainly attributable to the gambling and betting industry. Compensation paid to employees decreased by 1.9 per cent over this period due to a drop in government employment. The contribution to total gross value-added at basic prices of this industry increased from 5.5 per cent in 2004 to six per cent in 2005.
GDP Expenditure Approach: Analysis
by expenditure aggregates
Total final consumption expenditure
In the period under review, consumption expenditure increased nominally by Lm52.1 million or 4.4 per cent to Lm1,232.5 million from Lm1,180.4 million a year earlier. At constant 2000 prices, consumer expenditure was up by Lm15.1 million or 1.4 per cent to Lm1,098.0 million from Lm1,113.0 million last year. The overall performance in private consumers’ expenditure was spread among various categories of expenditure.
In particular, increases were registered in expenditure outlays on food and non-alcoholic beverages, alcoholic beverages and tobacco, clothing and footwear, housing, water, electricity, gas and other fuels, furnishings, household equipment and routine household maintenance, medical and health expenses, transport, education, restaurants and hotels. The highest increase recorded related to outlays on miscellaneous goods and services. A decline in expenditure outlays was registered in communication and recreation and culture.
The overall registered growth was partially a reflection of the increase in households’ expenditure on services along with an increase of imports of consumer goods during the period under review. The NPISH final consumption expenditure advanced by 3.7 per cent to Lm 33.1 million. In real terms, NPISH consumption edged up by 0.8 per cent.
Government finance
The general government’s final consumption expenditure amounted to Lm417.8 million, a decline of Lm0.4 million or 0.1 per cent over the previous year. This decline is spread across most expenditure categories, and reflects the lower outlays on goods and services, as well as lower outlays on wages and salaries.
Gross Fixed Capital Formation
Outlays on gross fixed capital formation increased from Lm380.8 million in 2004 to Lm410.5 million in 2005, an increase of 7.8 per cent over a period of one year. The government sector was the driving force behind this overall growth in gross fixed capital formation. Construction expenditure increased by Lm29.0 million or 13.8 per cent, while investment expenditure in machinery increased by Lm0.7 million, or 0.4 per cent. In real terms, investment expenditure increased by Lm21.2 million to Lm369.8 million.
Exports and Imports
Exports of goods and services declined by 1.5 per cent to Lm1,372.5 million. In real terms, exports went down by Lm51.4 million to Lm1,504.9 million. Imports of goods and services increased to Lm1,574.2 million, an increase of 3.2 per cent. In real terms, imports went up slightly to Lm1,697.5 million.