Malta Insights

NATHANAEL MUSCAT

MALTA SCORES LOWEST TAXES ON ELECTRICITY PRICES IN THE EU

The share of taxes and levies worked into electricity prices for Maltese households stood at six percent at the end of last year, the lowest rate in the EU. Figures by Eurostat reveal that, on average, taxes and levies accounted for about 40 percent of household electricity prices in EU states in the second half of 2019, rising to 54 percent in Germany and 64 percent in Denmark.

Statistical data for the last six months of last year, also shows that Malta had the fourth-lowest household energy prices calculated in absolute terms, at around €13 per 100 kWh. However, adjusted to purchasing power standards relative to each country, prices in Malta were the third-lowest following Finland and Luxembourg and ahead of France and Sweden.

Expressed in euro, the average price in the EU stood at €21.6 per 100 kWh, an increase of 1.3 percent compared with the second semester of 2018, reflecting the overall inflation rate measured by the Harmonised Index of Consumer Prices (HICP).

MALTA: TOURISM DROPS BY MORE THAN HALF IN MARCH

The total number of inbound tourists decreased by 56.5 percent in March, compared with the same month last year. Figures by the National Statistics Office reveal the harsh reality for the tourism

sector in Malta as measures to limit the spread of the coronavirus started coming into effect from the end of February.

Between January and March, inbound tourism fell by 13 percent from the first quarter in 2019 and by 11.6 from 2018, There were around 371,000 visits translating into 2.2 million nights – a 20 percent drop from the previous year.

The number of visitors in March was slightly over 75,000 pushing the total night-spend down by 60 percent from March 2019. Tourism over the three months fell sharply across all categories: leisure, business, and specialised holidays; however, inbound travel from non-EU countries still rose by almost 125 percent. In March, too, tourism from outside the EU, which includes the United Kingdom, was up by 25 percent. Incidentally, the UK represents the largest market corresponding to roughly a third of all incoming tourists. Expenditure by tourists over the three-month period was around €600 per capita, a decline of more than five percent from the first quarter of 2019. Excluding accommodation and travel costs, each visitor spent an average €240 during their stay, the lowest amount in three years. In fact, total tourism expenditure was estimated at just under €225 million, 17.5 percent down from the year before. The first Covid-19 measures came into force on February 28 mandating a quarantine period for inbound travellers from highrisk countries. Restrictions were gradually increased until ports were closed on March 18 and the airport, three days later.

MALTA: SOCIAL SECURITY SPEND TOPS €240 MILLION IN FIRST QUARTER

The expenditure on Social Security Benefits rose by 5.8 percent between January and March this year compared to the same period last year. Figures released by the National Statistics Office show a total spend of €243 million, the highest in the 18 years under review since 2003. The amount does not account for benefits related to Covid-19 measures, which started being disbursed in April. There was a rise in both contributory benefits, such as retirement pensions and industrial injuries gratuities, and non-contributory benefits which include disability assistance and in-work allowances.

The increase in contributory benefits was €12.2 million, or 6.7 percent over the previous year, while non-contributory benefits rose by an additional €48.7 million, or 2.3 percent.

The biggest share of contributory benefits are old-age pensions, making up three-fourths of the total expenditure. The largest spend in the category goes for pensions in the Two-Thirds system, which have also registered the steepest rise over a year as the number of beneficiaries grew by over 50,000.

Allowances for family and children account for nearly a third of non-contributory benefits, the largest portion in the category. The biggest rise was registered in children’s allowance schemes reflecting an increase in new beneficiaries of more than 40,000.

EMISSIONS FROM ENERGY USE DOWN IN THE EU, UP IN MALTA

Malta is one of four EU countries to have increased CO2 emissions from energy use in 2019, according to data published by Eurostat. Estimates show an overall reduction of 4.3 percent in carbon dioxide emissions from fossil fuel combustion in the EU compared with 2018.

The highest decrease was recorded in Estonia, with a drop of 22 percent over a year. Malta, on the other hand, registered the third-highest increase of 2 percent, following Austria (+2.8%) and Luxembourg (+7.5%). At the same time, Malta had the smallest share of total EU emissions from energy use throughout 2019 at 0.1 percent. Germany, the largest contributor, accounts for a quarter of the bloc’s emissions and reduced emissions by 4.6 percent.

Analysts observe that the significant drop across the EU-27 coincides with an increase in the price of the EU emission trading system allowances that came into effect in 2019, making it economically less profitable to use fossil fuels for the production of electricity. CO2 emissions are generated in the country where the fuels are burned, so imported electricity has no effect on the rates in the purchasing country as emissions would be reported in the country where the electricity has been produced.

MALTA REGISTERS THIRD-LOWEST DROP IN RETAIL TRADE IN THE EU

The volume of retail trade in March decreased by 1.2 percent from February, reflecting an EU-wide trend. Figures by Eurostat show a sharp drop in trade as the coronavirus pandemic was spreading across EU states in March; volume went down by 10.4 percent in EU countries and by 11.2 percent in the euro area compared with February.

The rate in Malta registered the biggest drop in the six months under review since October, hot on the heels of a 0.8 percent increase in February. The decrease, however, is the third-lowest in the EU following Norway (-0.9%) and Hungary (-0.2%). Estonia is the only country to manage an increase, even if by a slight 0.1 percent while no data is available for the Czech Republic, Cyprus, Greece, Italy and the Netherlands.

The decrease across the EU was pushed down by significant decline in the non-food products, down by 21.3 percent, and automotive fuel sales, down by 19.3 percent. The drop was even more marked in Eurozone countries, registering a 23.1 percent and 20.8 percent decreases in non-foods and automotive fuel trade, respectively. The volume of trade for foods, drinks and tobacco rose by 4.7 percent in the EU and by 5.0 percent in the euro area. Compared with March 2019, there was a general downward performance of 8.2 percent in the EU-27 and 9.2 percent in Eurozone countries.

MALTA: TRAFFIC ACCIDENTS DOWN BY 8 PERCENT IN COVID-19 PERIOD

The number of road traffic accidents dropped sharply in March contributing to an 8.2 percent decrease in accidents in the first quarter of the year compared with the same period in 2019. There were 261 accidents that caused injuries, including two fatalities. A third of the 3,357 accidents occurred in the northern harbour area stretching from Qormi to Msida to Pembroke, however the district registered a 15 percent decrease in accidents compared to 2019. On the other hand, an increase of six percent was observed in the south

eastern area from Marsascala to Gudja to Qrendi. Birkirkara was the locality with the highest rates of accidents accounting for slightly over eight percent of total instances.

Most collisions occurred between passenger cars, but there were 27 crashes into properties as well as 10 accidents involving a passenger car and bicycle, two of which causing grievous injuries.

MALTA ONE OF THREE COUNTRIES TO REGISTER INCREASE IN INDUSTRIAL PRODUCER PRICES

Malta, Cyprus, and Latvia were the only EU members to post a rise in industrial producer prices in March. Estimates by Eurostat indicate that industrial producer prices fell by 1.4 percent in the EU and by 1.5 percent in the eurozone compared to February. Malta bucked the trend a registered an increase of 0.2 percent, the same as Latvia. Cyprus recorded the highest increase at 0.5 percent while the biggest decrease was observed in neighbouring Greece, at -5.3 percent.

Compared with March 2019, industrial producer prices decreased by 2.8 percent in the euro area and by 2.5 percent in the EU. The most significant drop was felt in the energy sector which decreased by 5.5 percent. Prices for durable and non-durable consumer goods saw an increase of 0.1 percent.