NSO Malta | Gross Domestic Product: 2022

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Gross Domestic Product: 2022

NR036/2023

Data tal-Ħruġ: 28 February 2023

23 February 2023

Provisional estimates indicate that the Gross Domestic Product (GDP) for 2022 amounted to €16,870.3 million, registering an increase of €1,868.4 million, or 12.5 per cent, when compared to 2021. In volume terms, GDP rose by 6.9 per cent.

The production approach

During 2022, Gross Value Added (GVA) rose by 13.7 per cent in nominal terms and 8.1 per cent in volume terms, when compared to 2021.

The drivers behind this 8.1 per cent growth were Service activities (NACE Sections G to U), Industry (NACE Sections B to E) and Agriculture and fishing (NACE Section A), with a contribution of 7.7 percentage points, 0.7 percentage points and 0.1 percentage points, respectively. Conversely, Construction (NACE Section F) had a negative contribution of 0.3 percentage points. Compared to last year, Service activities increased by 9.0 per cent, Industry by 7.6 per cent and Agriculture and fishing by 8.5 per cent in volume terms, whereas Construction dropped by 7.0 per cent.

The increase in Service activities was mainly driven by the following sectors: Accommodation and food service activities (81.4 per cent), Transportation and storage (23.3 per cent), Administrative and support services activities (15.8 per cent), Information and communication (7.9 per cent), and Wholesale and retail trade; repair of motor vehicles and motorcycles (7.7 per cent)¹.

Net taxes on products contributed negatively towards GDP growth, with a decrease of 5.9 per cent in volume terms (Tables 1a and 1b).

The expenditure approach

The expenditure approach is another method used to calculate GDP and is derived by adding Final consumption expenditure of Households, General government, and Non-Profit Institutions Serving Households (NPISHs), Gross capital formation and Net exports.

The contribution of domestic demand to the year-on-year GDP growth rate in volume terms was of 10.9 percentage points, of which 4.7 were due to Final consumption expenditure and 6.1 to Gross capital formation. External demand registered a negative contribution of 4.0 percentage points, with 10.8 percentage points attributable to exports and 14.8 percentage points explained by imports.

In 2022, Final consumption expenditure witnessed an increase of 7.6 per cent in volume terms. This was the result of increases in Household expenditure, Government expenditure and NPISHs expenditure by 10.3 per cent, 2.4 per cent and 3.7 per cent, respectively.

Gross fixed capital formation rose by 30.4 per cent in volume terms. This increase was mainly attributable to investment in Transport equipment.

Exports and imports of goods and services in volume terms rose by 6.4 per cent and 9.7 per cent, respectively (Tables 2a and 2b).

The income approach

The third approach to measure economic activity is the income approach, which shows how GDP is distributed among compensation of employees, operating surplus of enterprises and taxes on production and imports net of subsidies.

Compared to 2021, the €1,868.4 million increase in nominal GDP was the result of a €643.9 million increase in Compensation of employees, a €1,172.2 million rise in Gross operating surplus and mixed income, and an increase of €52.2 million in Net taxation on production and imports (Table 3).

Gross National Income (GNI)

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 2022 was estimated at €15,561.5 million (Table 3).

Chart 1. GDP growth rate

(year-on-year)

Footnote

¹ Industries are listed according to their contribution to growth at NACE Section level.

Additional Tables and Charts

Table 1a. GDP identity from the production (output) side at market prices by period

Table 1b. GDP identity from the production (output) side in chain-linked volumes by period (reference year 2015)

Table 2a. GDP identity from the expenditure side at market prices by period

Table 2b. GDP identity from the expenditure side in chain-linked volumes by period (reference year 2015)

Table 3. GDP identity from the income side by period

All Tables

Methodological Notes

1. The compilation of quarterly national accounts estimates in the context of the COVID-19 crisis.

Under normal circumstances, GDP estimates are based on established sources and estimation techniques, which have been tested and evaluated carefully, as well as documented. GDP is estimated independently from the output approach and expenditure approach, complemented by estimates of income-related data. These estimates are based on a multitude of sources such as tourism statistics, short-term statistics, trade and balance of payments statistics, as well as administrative data.

Eurostat and national statistical authorities in the European Statistical System (ESS) have been working hard together to elaborate guidelines and notes on how to address the statistical challenges brought about by COVID-19 and thereby ensure that European statistics continue to be based on sound foundations. These guidelines cover the compilation of national accounts, as well as important national accounts data sources, such as the Harmonised Index of Consumer Prices (HICP), the Labour Force Survey (LFS), short-term business statistics, and intra-EU trade in goods. NSO followed these guidelines to mitigate the impact resulting from this crisis, which meant delays in data availability, lower response rates and possible quality issues. In this way, it ensured that the data continued to capture economic developments in the most reliable manner.

In view of these unprecedented developments, a thorough examination was carried out on the imputation methods and models used in the compilation of national accounts, given that, in some cases, past correlations between indicators and macroeconomic statistics were not expected to hold anymore during the COVID-19 crisis. In absence of traditional sources, compilers had to make assumptions about industries which were fully or partially ‘closed’. Furthermore, statisticians referred to alternative or complementary information, such as business and consumer surveys, information from professional federations and administrative data, in order to fill in for gaps in the established data sources.

NSO is committed to maintain the usual dissemination pattern of quarterly national accounts with the most accurate estimates possible, however, it is important to bear in mind that first estimates may be subject to larger revisions than usual.

For further details refer to:

Eurostat’s methodological note ‘Guidance on Quarterly National Accounts (Including Flash) Estimates in the Context of the COVID-19 Crisis’

Eurostat’s methodological note ‘Guidance on the Publication and Transmission of National Accounts Data and Metadata in the Context of the COVID-19 Crisis’

Eurostat’s methodological note ‘Guidance on Time Series Treatment in the Context of the COVID-19 Crisis’

2. Impact of some policy measures in the context of the COVID-19 crisis.

The Government announced active policy measures in order to mitigate the economic and social impact of the pandemic.

Such policy measures included, but were not limited to, the following:

• Employment-related measures: government support for keeping employees on the payroll system despite a slowdown in business activity, and support for self-employed and small businesses.

• Tax-related measures: deferral of tax deadlines.

• Vouchers: €100 worth of vouchers, expiring by the end of October 2020, were sent to each resident aged 16 years old and over to be spent locally, with 80% to be spent on accommodation, restaurant and bar services and 20% in outlets that reopened following a period of forced closure. Another €100 worth of vouchers, expiring on 31 October 2021, were also sent to each resident aged 16 years old and over to be spent locally, with 60% to be spent on accommodation, restaurants, bars and diving schools and 40% on retail and services.

• Utility bills: certain businesses received a refund of 50% on their electricity bills for the months of June, July and August 2020 and July, August and September 2021, capped at €1,500 per electricity account.

• Rent scheme: businesses that had to close their operations as a result of Legal Notices issued by the Health Authority in March 2021 were eligible for the rent scheme. Businesses that were receiving the wage supplement since 2020 and had availed themselves of the rent scheme in 2020, were eligible for a top-up of 50% on the amount received in the previous year in 2021. New applicants who were closed in March and April 2021 and benefitted from the wage supplement were eligible for the rent refund.

In this news release, the measures to support businesses in retaining their employees in the context of COVID-19 by financing wages, partly or fully, as well as refunds of utility bills and rents, were recorded as subsidies on production to employers. The voucher schemes have been classified as subsidies on products.

Taxes on production and imports are recorded when activities, transactions or other events occur and create the liability to pay taxes. In this news release, estimates were specifically necessary for VAT, classified as taxes on production and imports, due to the Government’s announced deferrals. This implies that revisions may be necessary in the future.

For further details refer to:

Eurostat’s methodological note ‘Draft Note on Statistical Implications of Some Policy Measures in the Context of the COVID-19 Crisis’.

3. Data in this news release is unadjusted. Seasonally adjusted data is available at:
EUROSTAT Website/Homepage/Complete Database

4. Data in this news release are in line with the European System of Accounts (ESA) 2010 manual (ISBN 978-92-79-31242-7). This system of accounts is mandatory for all EU Member States. The accounts are subject to audit by the European Court of Auditors and Eurostat’s GNI Committee to ensure reliability, comparability and exhaustiveness.

5. Gross Domestic Product (GDP) is an estimate of the value of goods and services at market prices produced in the economy over a period of time. The GDP is estimated in nominal terms using the production approach, aggregating the output of the various productive sectors net of the cost of intermediate inputs. The expenditure approach is reconciled with the production approach both in nominal and volume terms. GDP in volume terms excludes the effects of price inflation on market prices. The income approach shows how GDP is distributed into compensation of employees, operating surplus of enterprises and taxes on production and imports net of subsidies.

6. Data in this news release should be considered as provisional for 2018 to date.

7. Data users must be aware that the industrial activities of General government are spread over 21 different NACE categories (at A88 division) and include local councils and extra-budgetary units that are financially dependent on the government. Public administration and defence; compulsory social security (NACE 84) is the largest category and, in terms of gross value added, represented approximately 42.6 per cent of the General government sector in 2022.

8. The ESA 2010 GNI Inventory provides a detailed explanation of sources and methods used for estimating GNI in Malta. It is the basis for the Eurostat assessment of the quality and exhaustiveness of GNI data and their compliance with ESA 2010 in the context of the GNI for own resources purposes. The Inventory is a reference document that is kept up-to-date to reflect the latest methodology in place. Complementary to this inventory, process tables have been compiled for the reference year 2010. Process tables enable users to understand the compilation process of national accounts and thus shows the transition from basic data sources to final balanced national accounts figures. The GNI Inventory and the process tables are available online.

An updated GNI Inventory for reference year 2015 will be available online in the first half of 2023.

10. References to this news release are to be cited appropriately.

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