There was a widening of the current account deficit during the second quarter of 2006, together with net higher inflows on the capital and financial account, the National Statistics Office said yesterday.
Provisional balance of payments data for the second quarter of 2006 indicate that the deficit on the current account widened by Lm9.5 million over the same period of last year to Lm53.8 million.This was underpinned by an increase in the net deficit on the goods and services account, contrasted by higher net receipts of income and transfers from abroad, the NSO said.
The net deficit on merchandise trade widened by Lm15.9 million during the second quarter of 2006. While the total revenue from domestic exports rose by Lm30.0 million during the period, imports of merchandise increased by Lm45.9 million over the same period of last year.
The net surplus in the services account decreased by Lm10.8 million during the survey period. In the main, this was the outcome of a fall in revenue from the provision of transportation services to non-residents, as well as higher expenditure by Maltese residents travelling abroad.
The net balances on the income account and the current transfers account improved by Lm12.6 million and Lm4.6 million respectively. The income account was conditioned by higher receipts of investment income from abroad.
The capital and financial account registered net inflows of Lm87.8 million during the second quarter of 2006, up by Lm23.2 million from the same period last year. There was an increase in direct investment on account of an inflow of new capital by a credit institution operating in Malta, which also effected direct investments abroad.
The capital and financial account was also conditioned by significant flows of a portfolio and other investment nature, in the main carried out by banking institutions operating in Malta. The reserve assets of the country rose by Lm71.2 million during the second quarter of 2006, compared with a fall of Lm17.6 million during the same period last year.
Reflecting developments during the second quarter, the current account deficit widened by Lm15.5 million during the second half of 2006 to stand at Lm123.4 million.
This was conditioned by an increase in the visible trade gap as well as lower net receipts on the services account, contrasted by higher net receipts recorded in the income and current transfers accounts. Higher net inflows on the capital and financial account were registered for the first half of 2006. During the same period, reserve assets rose by Lm15.3 million as opposed to a decline of Lm53.0 million during the first six months of 2005.