Malta Insights

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ASIA REPRESENTS A FIFTH OF TRADE IN GOODS

Exports to Asian countries accounted for 18.8 per cent of the total trade goods in the first quarter of 2021, with a combined value of €142.2 million. Imports from Asia made up 21.9 per cent, equivalent to €251.1 million, in the same period. Figures by the National Statistics Office shows a decline in exported and imported goods to and from Asian countries compared with the first three months of 2020, but the balance of trade narrowed from a deficit of €120.7 million last year to a deficit of €109. 0 million this year.

The EU remains the biggest trading partner, absorbing 45.5 per cent of Malta’s total €756.7 million exports and sourcing 59.2 per cent of the €1,145.4 million imports. Imports to Italy fell from €274.4 million in the first quarter of 2020 to €197 million this year, but it was still Malta’s top trading country. Exports to Italy rose from €39.9 million to €71.6 million year-on-year, registering the biggest increase in exports.

Exports to Germany, on the other hand, saw the largest decrease (€72.5M), but at a total of €96.5 million, it was the biggest destination for exports. Germany is also the only EU member with which Malta registered a surplus in the balance of trade, closing at €24.8 million. A positive balance of trade was also registered with the United States (€8.4M), Tunisia (€3.9M), and South Africa (€1.2M).

IMPORTS FROM UK FALL BY 45% SINCE BREXIT

Total imports from Britain stood at €75.3 million in the first three months since the UK’s withdrawal from the EU came into full effect on January 1, 2021. In the first quarter of 2020, imports to Malta had a combined value of €137.5 million. Figures by the National Statistics Office, however, show an increase in the flow of goods in the opposite direction as exports increased from €10.3 million in 2020 to €18.8 million this year.

The balance of trade narrowed from a deficit of €127.1 million between January and March last year to a deficit of €56.5 million in 2021.

In the first quarter of this year, non-EU European trading partners that include the UK accounted for 10.4 per cent of total imports in goods to Malta and 4.6 per cent of total exports. In the same period last year, imports from this country grouping made up 14.2 per cent of the total share while exports contributed to 5.4 per cent.

TOTAL VALUE OF RESIDENTIAL PROPERTY SALES NEARS €230 MILLION IN APRIL

Final deeds of sale for residential properties reached a combined value of €228.4 million in April, almost level with the same month in 2019. Last year, total transactions amounted to €119.2 million. Figures by the National Statistics Office show that the number of final deeds of sale amounted to 1,130 in the fourth month this year, a decrease of 153 from the previous month.

Meanwhile, promises of sale totalled 1,430, the strongest April in the four years under review. The first three months of 2021 similarly registered higher numbers of promises of sale compared with the period 2018 to 2020.

The south-eastern region comprising of Ħaż-Żabbar, Xgħajra, Żejtun, Birżebbuġa, Marsasklala, and Marsaxlokk attracted the most interest from buyers, with 211 promises of sale, followed by Gozo with 207. The Cottonera area recorded 15 promises of sale, the lowest number among all regions and 38 less than the second-lowest region spanning Rabat, Mdina, Ħad-Dingli, Mtarfa, and Mġarr.

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EC FORECASTS ROBUST RECOVERY

Malta’s economy should see a robust recovery in 2021 and 2022, provided that the tourism sector opens up safely. In its Spring Forecast, the European Commission said that the recovery is expected to be driven by a rebound in tourism-related services exports, household consumption and investment.

Given the supportive fiscal policy stance, the general government deficit is set to widen further in 2021 before improving in 2022 on the back of an accelerating recovery and a winding-down of fiscal support.

In its report about Malta, the Commission noted how the pandemic has decimated tourism proceeds and made a deep dent in consumption. GDP fell significantly in 2020 with services exports and household consumption contracting sharply under the pressure of the pandemic and related safety measures.

On the contrary, financial services and gaming sector exports continued to perform robustly. Although the pandemic has clearly depressed economic activity in Malta, the government’s sizeable stimulus package has managed to partially offset some of the impact. Wage supplement schemes and other business support measures appear to have cushioned the drop in consumption.

OUTBOUND TOURISM DROPS BY ALMOST 85 PER CENT

Two-thirds of outbound tourists in the first quarter were in the 2544 age bracket. Data by the National Statistics Office shows that just over 18,700 people left Malta for tourism purposes between January and March this year, a decrease of 84 per cent from the same period in 2020. Total estimated expenditure by visitors stood at €18 million, equivalent to €968 per person and an increase from €704 spent last year. Nevertheless, the spend per night decreased from €121 in 2020 to €58 this year.

Italy was the most popular destination by far, with close to 7,000 people choosing to holiday in the Mediterranean peninsula. Almost as many travelled to other countries in the EU, mainly Germany (807) and France (797). The UK received 846 visitors from Malta, slightly more than a tenth of traffic that went to markets outside the EU.

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