Gross Domestic Product (GDP) is an estimate of the value of goods and services produced in the economy over a period of time. The GDP is estimated at current prices using the Production
Approach, aggregating the output of the various productive sectors net of the cost of intermediate inputs. The Expenditure Approach is reconciled with the Production Approach and is used to derive an estimate of GDP at constant prices, in other words, excluding the effects of price inflation on market prices. The Income Approach shows how GDP at market prices is distributed into compensation of employees, operating surpluses of enterprises and taxes on production and imports net of subsidies. GDP per capita is derived by dividing GDP by the average total population (i.e. including residents who are not Maltese nationals) for the period under review.
Provisional estimates indicate that the Gross Domestic Product (GDP) for 2007 reached e5.4 billion (Lm2.3 billion), an increase of 6.1 per cent when compared to 2006. Output exceeded the e10 billion mark. In real terms GDP grew by 3.8 per cent. Gross National Income at market prices went up by 8.1 per cent.
The Production Approach
During 2007 growth in value added was generated primarily by service activities: remote gaming activities; real estate, renting and business activities; transport, storage and communication; hotels and restaurants; public administration and health. Increases were also registered in manufacturing, in particular the manufacture of chemicals and chemical products. Declines were registered in agriculture, electricity and water supply, due to rising oil prices, and in financial intermediation, in particular international banking institutions’, due to increases in other operating expenses.
The Expenditure Approach
This approach indicates that GDP at constant prices went up by 3.8 per cent. Total final consumption expenditure by households, by Non-Profit Institutions Serving Households
(NPISHs) and by General Government went up by 2.3 per cent. Gross fixed capital formation at constant prices remained practically unchanged. Real exports and real imports of goods and services went down.
The Income Approach
The annual increase in GDP at current prices, amounting to e310.8 million (Lm133.4 million), is estimated to have been distributed into a e95.3 million (Lm40.9 million) rise in compensation of employees, a e191.5 million (Lm82.2 million) increase in gross operating surpluses of enterprises, and a e24.0 million (Lm10.3 million) addition in net taxation on production and imports.
Gross National Income
Considering the effects of income and taxation paid and received by residents to and from the rest of the world, Gross National Income (GNI) at market prices is estimated at e5.2 billion (Lm2.2 billion), up by 8.1 per cent over 2006.