A provisional statement on the international economic and financial transactions of Malta during the first quarter of the current year reveals a deterioration in the current account balance of Lm8.2 million, from a net deficit of Lm61.4 million during the March 2005 quarter to one of Lm69.5 million during the same quarter in 2006, the National Statistics Office reported yesterday.

This was generated by a worsening in the net balances of both the income account as well as the goods account of the statement.

The net balance in the income account recorded a turnaround of Lm17.5 million, from a net surplus of Lm11.9 million during the first quarter of 2005 to a net deficit of Lm5.6 million during the March 2006 quarter; while the visible trade gap in the goods account expanded by Lm12.5 million, from a net deficit of Lm87.6 million during the first three months of 2005 to one of Lm100.2 million during the corresponding period in 2006.

Indeed, the net balance in the income account was adversely affected by a rise in dividend payments to non-resident shareholders having direct interest in enterprises established in Malta, whereas that in the goods account was affected by an increase in the imports bill of Lm44.1, that was higher than the rise in export receipts of Lm31.6 million.

In contrast, however, the net balance in the current transfers account shifted favourably by Lm17.9 million, from a net deficit of Lm5 million during the March 2005 quarter to a net surplus of Lm13 million during the relative quarter in 2006, while that in the services account ameliorated by Lm4 million, from a net surplus of Lm19.3 million during the first quarter of 2005 to one of Lm23.3 million during the same period in 2006.

As regards the capital and financial account of the statement, the capital account was shaped by net inflows of Lm11.1 million as opposed to net inflows of Lm16.8 million during the March 2005 quarter, while the financial account was marked by net inflows of Lm96.4 million as against net inflows of Lm76.3 million during the first quarter of 2005.

Indeed, the direct investment abroad was characterised by net inflows of Lm0.2 million as opposed to net inflows of Lm13.6 million during the March 2005 quarter, whereas the direct investment in Malta was marked by net inflows of Lm65.5 million as against net inflows of Lm21.4 million during the March 2005 quarter.

The portfolio investment account was shaped by net outflows of Lm140.7 million as opposed to net outflows of Lm109.2 million during the first three months of 2005, while the other investment account was marked by net inflows of Lm108.7 million as against net inflows of Lm122.3 million during the first quarter of 2005.

As a result of the above shifts in the current and capital and financial account of the statement, the reserve assets of the country fell by Lm55.8 million as against a fall of Lm35.4 million during the March quarter last year.