Provisional figures on the Balance of Payments Statement of Malta for the fourth quarter of 2008 indicate a deterioration in the current account balance of €14.1 million, from a net deficit of €215.1 million during the December 2007 quarter to one of €229.2 million during the last quarter in 2008.

Essentially, this deterioration was brought about by an adverse shift in the net positive balance of the income account of the Statement, from a net surplus of €7.6 million during the fourth quarter of 2007 to a net deficit of €27.5 million during the period under consideration. Indeed, the net balance in the income account was conditioned by an increase in dividend payments to foreign investors having direct ownership in locally-operating enterprises, as well as by a rise in retained earnings that are due to foreign-owned entities operating in Malta.

In contrast, the net negative balance in the current transfers account declined by €11.8 million, from a net deficit of €89.4 million during the December 2007 quarter to one of €77.6 million during the relative quarter in 2008, whereas the visible trade gap in the goods account contracted by €7.2 million, from a net deficit of €278.2 million during the last three months of 2007 to one of €271.0 million during the comparative period in 2008. In fact, the net balance in the current transfers account was favourably influenced by a decline in transfer payments of €19.6 million that was stronger than the drop in transfer receipts of €7.8 million; meanwhile the net balance in the goods account was affected by a fall in import outlays of €169.9 million that was higher than the decrease in export revenue of €162.7 million registered during the period under review.

Also, the net positive balance in the services account improved by a margin of €2.0 million, from a net surplus of €145.0 million during the December 2007 quarter to one of €146.9 million during the period under review. The net balance in the services account was positively affected by improvements recorded in the other services account as well as the transport account of €17.0 million and €13.7 million respectively that offset the deterioration of €28.7 million registered in the travel account of the Statement.

As regards the capital and financial account of the Statement, the capital account was marked by net inflows of €10.0 million compared to net inflows of €17.9 million during the December quarter in 2007, whereas the financial account was shaped by net inflows of €234.5 million as against net inflows of €51.0 million during the last quarter of 2007.

Direct investment abroad registered net outflows of €41.2 million compared to net outflows of €20.3 million during the last quarter of 2007, whereas the direct investment in Malta registered net inflows of €249.5 million as against net inflows of €48.0 million during the fourth quarter of 2007.

The portfolio investment account was characterised by net inflows of €2,656.6 million compared to net inflows of €143.8 million during the December 2007 quarter, while the financial derivatives account was marked by net outflows of €307.9 million as opposed to net inflows of €42.9 million during the last quarter of 2007. Also, the other investment account was shaped by net outflows of €2,412.2 million as opposed to net inflows of €310.1 million during the December quarter in 2007.

The reserve assets of the country fell by €89.7 million in contrast to a rise of €473.6 million during the fourth quarter of 2007

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