In the second quarter, Malta's economic growth rose to 9%, the highest in the EU and more than twice the average, Prime Minister Robert Abela Tweeted.
A statement by the National Statistics Office read that provisional estimates indicate that the Gross Domestic Product (GDP) for the second quarter of 2022 amounted to €4,100.4 million, registering an increase of €526.6 million, or 14.7%, when compared to the same quarter of 2021. In volume terms, GDP rose by 8.9%, the National Statistics Office added.
During the second quarter of 2022, Gross Value Added (GVA) rose by 15% in nominal terms and 9% in volume terms, when compared to the corresponding quarter of 2021. The drivers behind this 9% growth were service activities and Industry, with a contribution of 8.8 percentage points and 0.4 percentage points, respectively. Conversely, construction had a negative contribution of 0.2 percentage points. agriculture and fishing had a neutral impact on GVA growth in volume terms.
Compared to the same quarter last year, service activities increased by 10.4% and Industry by 4.3% in volume terms. A drop of 0.7% and 5.3% was recorded in agriculture and fishing activities and construction, respectively.
The increase in Services was mainly driven by the following sectors: Accommodation and food service activities (263.1%), information and communication (15.3%), wholesale and retail trade; repair of motor vehicles and motorcycles (14.6%), arts, entertainment, and recreation (10.1%), and transport and storage (16.9%).
Net taxes on products contributed positively towards GDP growth, with an increase of 8.2% in volume terms.
The expenditure approach is another method used to calculate GDP and is derived by adding final consumption expenditure of households, general government, and non-profit institutions serving households (NPISHs), gross capital formation and net exports. The contribution of domestic demand to the year-on-year GDP growth rate in volume terms was 4.5 percentage points, with final consumption expenditure having a positive contribution of 7.5 percentage points and gross capital formation contributing negatively by 3.0 percentage points.
External demand also registered a positive contribution of 4.5 percentage points, with 9.9 percentage points attributable to exports and 5.5 percentage points explained by imports. In the second quarter of 2022, final consumption expenditure witnessed an increase of 12.1% in volume terms. This was the result of an increase in the expenditure of households, general government and NPISHs of 12.1%, 12.4% and 6.7%, respectively
Gross fixed capital formation declined by 12.3 per cent in volume terms. This decrease was mainly attributable to investment in machinery and equipment. Exports and imports of goods and services in volume terms rose by 6.4% and 3.9%, respectively.
The income approach
The third approach to measure economic activity is the income approach, which shows how GDP is distributed among compensation of employees, operating surplus of enterprises and taxes on production and imports net of subsidies. Compared to the second quarter of 2021, the €526.6 million increase in nominal GDP was the result of a €141.9 million increase in compensation of employees, a €297.7 million rise in gross operating surplus and mixed income, and an increase of €86.9 million in net taxation on production and imports.
Gross National Income (GNI)
GNI differs from the GDP measure in terms of net compensation receipts, net property income receivable and net taxes receivable on production and imports from abroad. Considering the effects of income and taxation paid and received by residents to and from the rest of the world, GNI at market prices for the second quarter of 2022 was estimated at €3,786.3 million.
PN statement
In a statement, the PN said that while the figures of Malta's growing economy are good, it is insisting that if the economy is truly growing, that the government ensure that everyone benefits from it, and that the cost of living issue be addressed.