Provisional figures on the Balance of Payments statement of Malta for the third quarter of 2008 show a deterioration in the net surplus balance of the current account of €22.1 million, from a net positive balance of €66.7 million during the July to September 2007 period to one of €44.5 million during the relative period in 2008.
The worsening in the current account balance was essentially brought about by the combined effect of an increase in the visible trade gap in the goods account as well as by a decline in the net surplus of the current transfers account in the statement. In fact, the net deficit in the goods account increased by €78.7 million, from a net negative balance of €264.7 million during the third quarter of 2007 to one of €343.4 million during the quarter under review; while the net surplus in the current transfers account shrunk by €18.6 million, from a net positive balance of €29.9 million during the July to September 2007 period to one of €11.2 million during the same period in 2008.
Indeed, the goods account was affected by a drop in earnings from merchandise exports of €71.5 million as well as by an increase in import outlays of €7.2 million; while the current transfers account was influenced by an increase in government transfer payments to non-resident entities that were higher than the increase in government transfer receipts from abroad registered during the period under consideration.
On the other hand, however, the net surplus in the services account improved by €73.1 million, from a net positive balance of €339.5 million during the July to September 2007 quarter to one of €412.6 million during the relative period in 2008; whereas the net deficit in the income account contracted by €2.1 million, from a net negative balance of €38.0 million during the third quarter of 2007 to one of €35.9 million during the corresponding period in 2008. Indeed, the improvement in the net balance of the services account was particularly determined by a fall in the expenditure on other services from non-residents abroad of €46.8 million as well as by a rise in revenues from the provision of similar services to foreign entities abroad of €27.9 million.
In the capital and financial account of the statement, the capital account was marked by net inflows of €6.1 million as against net inflows of €27.4 million during the third quarter of 2007; while the financial account was shaped by net outflows of €132.2 million as opposed to net outflows of €120.4 million during the July to September period last year.
Indeed, direct investment abroad recorded net outflows of €0.4 million as against net outflows of €1.9 million during the September 2007 quarter; whereas direct investment in Malta registered net inflows of €146.3 million as opposed to net inflows of €308.0 million during the third quarter last year.
Also, the portfolio investment account was marked by net outflows of €901.1 million as against net inflows of €780.6 million during the July to September period in 2007; while the other investment account was characterised by net inflows of €596.6 million as opposed to net outflows of €1,179.3 million during the September 2007 quarter last year. In addition, the financial derivatives account was marked by net outflows of €16.6 million as against net inflows of €45.8 million during the July to September period in 2007.
As a direct consequence of the above shifts in the statement, the reserve assets of the country fell by €42.3 million as opposed to an increase of €73.7 million during the September quarter last year.