26 JUNE 2002
Over this years first quarter, the Maltese economy had pulled itself out of a virtual recession according to figures released on Monday by the National Office of Statistics.
Following two consecutive quarters of negative growth Maltas Gross Domestic Product (GDP) increased by Lm11.4 million to Lm398.8 million over the January to March period, compared to the same quarter last year.
This translates into a nominal growth of 2.9 per cent. In real terms, the GDP increased by 1.4 per cent or Lm4.8 million to Lm340.7 million.
The Gross National Product (GNP) increased nominally by Lm14 million or 3.5 per cent to Lm412.5 million over the same quarter last year. In real terms GNP was up by Lm9.7 million or 2.8 per cent to Lm355.4 million.
Sectoral contributions to GDP
Agriculture and Fishing
In the first quarter this year, the contribution of this sector to GDP increased by Lm0.5 million to Lm7.9 million. Within this sector, employment income increased by 5.4 per cent whilst the profitability increased by Lm0.4 million to Lm6.8 million. Fruit and vegetables sold through organised markets contributed significantly to this sectors growth.
Construction and Quarrying
The industry sustained the same average growth registered during the previous two years, and during the quarter under review its value added advanced by 13.5 per cent to Lm11.1 million. This increase in value added is the second highest increase recorded by all sectors. Profitability improved by 17 per cent while the wage bill increased by 11.7 per cent to Lm7.2 million.
This sectors nominal contribution to the GDP decreased by Lm6.8 million or 7.9 per cent to Lm78.4 million from Lm85.2 million last year. Estimated profits in the manufacturing sector declined by 12.3 per cent, whilst employment income decreased by four per cent. The electronics sub-sector sustained the downward trend reported during 2001 while the other sub-sectors nominal contributions to the GDP remained unchanged when compared to the same quarter last year. This sectors profit component increased by 7.4 per cent, whilst employment income decreased by 3.9 per cent. The manufacture of other transport equipment triggered this drop in employment income; otherwise the other sub-sectors registered a slight increase of 0.9 per cent in employment income.
Transport and Communications
The contribution of this sector decreased by Lm2.1 million, or 9.3 per cent, to Lm20.3 million from Lm22.4 million during the same quarter last year. Within this sector, income from employment decreased by 5.5 per cent or Lm0.8 million to Lm13.4 million, the air transport sub-sector being the main contributor towards this reduction. On the other hand, the sea transport sub-sector contributed towards a positive growth in employment income. This sector registered a reduction in profits of Lm1.3 million or 15.9 per cent to Lm6.8 million. At six per cent, this sectors relative contribution to the GDP decreased when compared to 6.7 per cent last year.
Wholesale and Retail
The sector registered a slight increase in value added of 0.7 per cent to Lm34.5 million from Lm34.3 million over the corresponding quarter in the previous year. Employment income remained practically at the previous years level of Lm10 million, declining marginally by 0.3 per cent. This was entirely due to a fall in employment in this sector. Profits increased by 1.1 per cent from Lm24.2 million in the same period last year to Lm24.5 million. The poor performance registered by this sector is largely due to a decline in the imports of capital goods and industrial supplies. The sectors relative contribution to the GDP remained at the same level of last year at just over 10 per cent.
Insurance, Banking and Real Estate
The contribution of the sector to GDP rose by Lm4.9 million or 18.3 per cent to Lm31.9 million when compared to the same quarter last year. Within this sector, income from employment remained practically at last years level. However, this sectors profit component increased by Lm4.9 million or 31.9 per cent to Lm20.5 million when compared to Lm15.5 million last year, implying that the decrease in profits suffered by the real estate sub-sector was more than offset by the insurance and banking sub-sectors.
At 9.4 per cent, this sectors relative contribution to the GDP increased when compared to 8.1 per cent last year.
The sectors share of GDP went up from 5.7 per cent last year to 6.3 per cent this year. In nominal terms the gross value added in this sector went up by Lm2.2 million to Lm21.2 million. Wages in this sector remained practically unchanged at Lm11.5 million. Reported profits, however, increased by almost 30 per cent or Lm2.2 million to Lm9.7 million.
The contribution of the sector to GDP totalled Lm57.4 million, an increase of Lm1.5 million, or 2.7 per cent, over the first quarter of 2001. The revision in the collective agreement at the University of Malta, as well as the setting up of the Malta College of Arts, Science and Technology (MCAST) were the main contributors to this increase. Following last years implementation of the new collective agreement, public service wages and salaries this year registered only normal incremental increases. The sectors share of the GDP edged up to 16.9 per cent.
Income from property increased by Lm2.5 million or 7.5 per cent from Lm33.3 million to Lm35.8 million in the period under review. The interest component rose by Lm1.7 million or seven per cent, while the rents component rose by Lm0.8 million or 8.6 per cent.
The sectors overall performance improved by Lm1.6 million or four per cent to Lm40.5 million from Lm38.9 million in the same period of last year. The profitability of this sector increased by 6.2 per cent, up by Lm0.8 million over last year. Income from employment also registered an increase of Lm0.7 million, or 2.9 per cent, to Lm26.6 million. Due to various circumstances, there was a drop in overall wages and profits of the hotel industry. However this decline was compensated by an increase in the value added of the other smaller components within the private services sector. This sectors relative contribution to the GDP rose to 11.9 per cent this year.
In the first quarter this year, consumers expenditure nominally increased by Lm23 million or 9.8 per cent to Lm256.5 million from Lm233.6 million a year earlier. In real terms, private consumption expenditure increased by 6.3 per cent to Lm215.9 million from Lm203 million a year earlier.
Moderate increases in expenditure outlays in nominal terms were registered on food, beverages and tobacco, clothing and footwear, gross rent, fuel and power, and recreation, entertainment, education and cultural services and miscellaneous goods and services. The 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.
Expenditure on gross fixed capital formation decreased nominally by Lm7.8 million or 8.2 per cent to Lm87.7 million from Lm95.5 million last year. Compared to the same quarter last year, the increase of 10.1 per cent in construction was entirely wiped out by a drop in investment in machinery of Lm11 million, or 17.2 per cent. In real terms, gross fixed capital formation decreased by 14.4 per cent to Lm72.2 million from Lm84.4 million last year.
Government expenditure on goods and services increased from Lm78.7 million to Lm85.6 million or 8.8 per cent. Government expenditure on government departments increased by 4.3 per cent, expenditure by government entities increased by 19.1 per cent and treasury pensions increased substantially by 40.4 per cent. In real terms, government consumption expenditure increased by Lm4.5 million, or 7.2 per cent, to Lm67.1 million from Lm62.6 million in the same quarter last year.
Exports of goods and services declined by Lm26.1 million to Lm317.7 million. In real terms, exports decreased by Lm18.3 million to Lm279.4 million. Imports of goods and services also dropped by Lm44.3 million to Lm343.3 million. In real terms imports went down by 12.9 per cent to Lm289.3 million. It is interesting to note that in the electronics sub-sector, the percentage drop in export prices was greater than the percentage drop in import prices. This affected, to a great extent, the overall import and export unit value indices and, in turn the growth in real GDP.