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The provisional estimates indicate that the Gross Domestic Product (GDP) for the second quarter of 2023 amounted to 4.7 billion euros, registering an increase of 416.9 million euros, which is 9.7 percent, compared to the same quarter of 2022. In terms of volume, the GDP increased by 3.9 percent.

For the second quarter of 2023, the Gross Domestic Product (GDP) of the Maltese economy registered a positive year-on-year growth rate of 3.9 percent in volume terms.

The GDP deflator went up by 5.6 percent compared to the same quarter last year. This represents a decrease of 0.1 percentage points in comparison to the year-on-year rate recorded in the first quarter of 2023.

The production approach, also known as the output approach, measures GDP as the sum of Gross Value Added (GVA), which represents the difference between the value of output and the value of intermediate consumption, and taxes net of subsidies on products.

During the second quarter of 2023, GVA increased by 5.2 percent in volume terms, compared to the corresponding quarter of 2022.

The contribution to the growth rate of GVA in volume terms from Service activities (NACE Sections G to U) and Industry (NACE Sections B to F) was positive and stood at 4.0 percentage points and 1.3 percentage points, respectively. In contrast, Agriculture and fishing (NACE Section A) recorded a negative contribution of 0.1 percentage points.

The increase in Service activities was mainly driven by growth in the following sectors: Administrative and support services activities (25.4 percent), Financial and insurance activities (15.4 percent), and Accommodation and food service activities (21.8 percent).

The expenditure approach is another method used to calculate GDP and is derived by adding Final consumption expenditure, Gross capital formation, and Net exports.

Domestic demand had a negative contribution of 2.7 percentage points to the year-on-year GDP growth rate in volume terms. Conversely, external demand registered a positive contribution of 6.6 percentage points.

In the second quarter of 2023, Final consumption expenditure increased by 2.9 percent in volume terms. This was mainly the result of an increase in Private final consumption of 5.9 percent. General government final consumption decreased by 3.8 percent.

Gross fixed capital formation declined by 18.3 percent in volume terms. This decrease was mainly attributable to lower investment in Transport equipment.

Exports of goods and services in volume terms increased by 2.5 percent, and Imports of goods and services declined by 1.6 percent.

The income approach is the third method used to measure economic activity, showing 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 2022, the increase of €416.9 million in nominal GDP was mainly the result of increases in Compensation of employees and Gross operating surplus and mixed income of €135.4 million and €285.3 million, respectively. These increases were partly offset by a decrease of €3.8 million in Net taxation on production and imports.

Gross National Income (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 2023 was estimated at €4,278.6 million, registering an increase of €398.1 million, or 10.3 percent, when compared to the same quarter of 2022.

ARTICLE WRITTEN BY NSO

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