NSO Malta | Direct Investment in Malta and Abroad: January-June 2022

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Metodoloġija

Direct Investment in Malta and Abroad: January-June 2022

NR024/2023

Data tal-Ħruġ: 15 February 2023

Cut Off Date: 09 February 2023

As at the end of June 2022, the stock position of Foreign Direct Investment in Malta stood at €208.6 billion, while Direct Investment abroad amounted to €57.8 billion.

Foreign Direct Investment (FDI) in Malta

Foreign direct investment flows were estimated to be €2.0 billion during the first six months of 2022. The main contributors to FDI flows were Financial and insurance activities, accounting for 85.3 per cent of the total (Table 2).

In June 2022, the stock position of FDI in Malta amounted to €208.6 billion, an increase of €8.3 billion over the corresponding period of the previous year. Financial and insurance activities recorded the largest share at 97.6 per cent of FDI stocks in June 2022 (Table 3).

Direct Investment Abroad

During the first six months of 2022, direct investment flows abroad totalled €3.2 billion, mainly in the form of claims on direct investors (Table 4).

The stock position of direct investment abroad stood at €57.8 billion in June 2022, down by €748.3 million over the stock position in 2021. Financial and insurance activities made up 98.9 per cent of total FDI abroad (Table 6).

Chart 1. FDI in Malta and abroad

Stock positions as at the end of June

Additional Tables and Charts

Table 1. Foreign Direct Investment flows in Malta

Table 2. Foreign Direct Investment flows in Malta: Economic activity

Table 3. Stock Position of Foreign Direct Investment in Malta: Economic activity

Table 4. Direct Investment flows abroad

Table 5. Direct Investment flows abroad: Economic activity

Table 6. Stock Position of Direct Investment abroad: Economic activity

All Tables

Methodological Notes

1. The collection, compilation and presentation of both the International Investment Position (IIP) and the Balance of Payments (BoP) statements of Malta fall under the responsibility of the National Statistics Office (NSO), with the co-operation of the Central Bank of Malta (CBM). Direct Investment is extracted from both statements, and compiled in accordance with the international guidelines set out in the sixth manual of the International Monetary Fund (BPM6).

However, the Direct Investment news release is presented on a directional basis, ie. inward and outward, rather than on an asset and liability basis. The statement incorporates data relating to special purpose entities which are classified under financial service activities. This inclusion has brought about significant changes in the FDI statement.

2. Direct Investment is defined as “a category of cross-border investment associated with a resident in one economy having control or a significant degree of influence on the management of an enterprise that is resident in another economy.” (BPM6).

a. Direct Investment is sub-divided into two categories:

● Foreign Direct Investment (FDI) in Malta – where a foreign investor owns 10% or more of the ordinary shares (or voting power) of an enterprise in Malta; and

● Direct Investment Abroad – where a Maltese resident entity (or an individual, government or association) owns 10% or more of the ordinary shares of an enterprise in another economy. These companies can be subsidiaries, affiliates or branches.

b. Direct Investment is made up of three basic components:

● Equity Capital – comprising equity investment in subsidiaries, associates and branches. Capital contributions (e.g. provisions of machinery) and purchase of immovable property are also classified under equity capital.

● Reinvested Earnings – consisting of the direct investor’s share of earnings not distributed as dividends by subsidiaries and associates; and earnings that branches do not remit to the direct investor. Losses are regarded as negative reinvested earnings.

● Other Capital – including inter-company transactions such as borrowing and lending of funds; and trade debits and credits between direct investors and direct investment enterprises. Transactions between enterprises in different economies that share the same direct investor are also considered as direct investment and included under other capital.

3. Direct Investment flows include transactions occurring during a particular period. Besides accumulated flows, the Direct Investment Stock Position takes into account any market value revaluations, reclassifications and exchange rate changes prevailing at the end of the reporting period.

4. The type of data collection system used to compile the Direct Investment is a composite system based on monthly, quarterly and annual direct reporting (DR) enterprise surveys, as well as various other sources that are identified from time to time by the BoP compilers. No major sectors of the economy are excluded from the aggregate data. The data for all components are compiled from these surveys. Where not directly available, preliminary figures on reinvested earnings are estimates based on an average of the previous four years. The final data on reinvested earnings are then compiled from the annual DR survey.

5. The classification used for economic activity is NACE Rev. 2, which corresponds to the Statistical Classification of Economic Activities in the European Community. Both the data on Direct Investment abroad and Foreign Direct Investment in Malta are classified on the basis of the industrial activity of the resident direct investment enterprises. Due to confidentiality issues, aggregate economic activities are grouped as follows:

Manufacturing includes:

Manufacturing industry

Transportation, Accommodation and Real Estate Activities include:

Land, sea and air transport

Warehousing and support activities for transportation

Postal and courier activities

Accommodation and food service activities

Real estate activities

Financial and Insurance Activities include:

Financial service activities

Insurance, reinsurance and pension fundings

Activities auxiliary to financial services

Information and Communication Activities include:

Publishing activities

Activities connected to audio and video productions

Telecommunications

Computer programming, consultancy and related activities

Information service activities

Professional, Scientific and Technical Activities include:

Legal and accounting activities

Business and management consultancy activities

Architectural, engineering and other technical activities

Scientific research and development

Advertising and market research

Other professional, scientific and technical activities

Veterinary activities

Other Activities include:

Agriculture and fishing

Mining and quarrying

Electricity, gas, steam and air conditioning supply

Water supply; sewerage, waste management and remediation activities

Construction industry

Wholesale and retail; repair of motor vehicles and motorcycles

Administrative and support service activities

Education, health and social work activities

Arts, entertainment and recreation

Other activities not allocated elsewhere

6. Data are to be considered provisional.

7. More information relating to this news release may be accessed at:

Statistical Concepts

Metadata

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