Malta cuts external transactions deficit by €55 million

Provisional indicators on Malta’s external transactions with the world reveal a favourable decline in the current account balance of €54.8 million.

According to data published by the National Statistics Office, the net deficit of €117.3 million during the March 2013 quarter decreased to €62.6 million in the first quarter of this year.

Contributing towards this amelioration was primarily an improvement in the net negative balance of the income account of €86 million, as well as an increase in the net positive balance of the services account of €15.9 million. The net balance in the income account was marked by a drop in the retained earnings and dividend payments due to foreign financial institutions operating in Malta.

The services account was favourably affected by the combined effect of an increase in earnings from tourism that more than offset the rise in outlays by residents travelling abroad; as well as by a fall in outlays from a variety of services acquired by Malta from abroad.

On the other hand, the current account was adversely affected by an increase in the net negative balance of the goods account of €36.9 million, as well as by a deterioration in the net positive balance of the current transfers account of €10.1 million.

The capital account of the statement recorded net inflows of €28.9 million, as compared with net inflows of €16.7 million during the corresponding period last year; whereas the financial account registered net outflows of €71.1 million as against net outflows of €40.4 million during the same period in 2013.

Direct investment abroad fell by €86.8 million, while direct investment in Malta dropped by €1,267.4 million due to a reduction in the equity capital of a financial intermediary operating in Malta.