NSO Malta | Gross Domestic Product: Q3/2023

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Gross Domestic Product: Q3/2023

NR214/2023

Release Date: 28 November 2023

Cut off Date: 23 November 2023

Provisional estimates indicate that the Gross Domestic Product (GDP) for the third quarter of 2023 amounted to €5.2 billion, registering an increase of €610.2 million, or 13.3 per cent, when compared to the same quarter of 2022. In volume terms, GDP rose by 7.1 per cent.

For the third quarter of 2023, the Gross Domestic Product (GDP) of the Maltese economy registered a positive year-on-year growth rate of 7.1 per cent in volume terms.

The GDP deflator went up by 5.8 per cent compared to the same quarter last year.

Table 1. Selected indicators

		Q3 2022	Q4 2022	Q1 2023	Q2 2023	Q3 2023
Gross domestic product (nominal)	€ 000's	4,578,511	4,531,746	4,511,616	4,852,003	5,188,727
Gross national income (nominal)	€ 000's	4,152,174	4,059,259	4,163,138	4,375,147	4,758,587
Gross domestic product (deflator)	2015=100	120.0	120.2	121.5	124.9	127.0
Gross domestic product per capita (nominal)	€	8,597	8,422	8,316	8,922	9,504
Gross national income per capita (nominal)	€	7,797	7,544	7,674	8,045	8,716

Chart 1. Gross Domestic Product

growth rates, volume terms, year-on-year

The production approach

The production approach, also called the output approach, measures GDP as the sum of the Gross Value Added (GVA), which is the difference between value of output and the value of intermediate consumption, and Taxes less subsidies on products.

During the third quarter of 2023, GVA rose by 4.7 per cent in volume terms, when compared to the corresponding quarter of 2022.

The contribution to the GVA growth rate in volume terms of Service activities (NACE Sections G to U) recorded a positive contribution of 5.2 percentage points. Conversely, Industry (NACE Sections B to F) and Agriculture and fishing (NACE Section A) both recorded a negative contribution of 0.2 percentage points each.

The increase in Service activities was mainly driven by the growth rates recorded in the following sectors: Administrative and support services activities (24.1 per cent), Financial and insurance activities (14.9 per cent) and Arts, entertainment and recreation (7.7 per cent).

Chart 2. Gross value added

growth rates, volume terms, year-on-year

Table 2. Production, contributions to GDP growth in volume terms

		Q3 2022	Q4 2022	Q1 2023	Q2 2023	Q3 2023
Gross value added	p.p.	8.7	8.6	6.4	7.2	4.4
Agriculture & fishing	p.p.	-0.5	0.0	0.0	0.0	-0.2
Industry	p.p.	0.6	1.0	0.3	0.7	-0.2
Services	p.p.	8.5	7.5	6.2	6.5	4.8
Taxes less subsidies on products	p.p.	-2.3	-1.2	-0.1	-1.3	2.6

Note: Contributions may not add up due to rounding.

The expenditure approach

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 3.4 percentage points to the year-on-year GDP growth rate in volume terms. Conversely, the external demand registered a positive contribution of 10.5 percentage points.

In the third quarter of 2023, Final consumption expenditure increased by 5.6 per cent in volume terms. This was the result of increases in Private final consumption and General government final consumption of 7.5 per cent and 0.7 per cent, respectively.

Gross fixed capital formation declined by 26.8 per cent in volume terms. This decrease was mainly attributable to lower investment in Transport equipment.

Exports of goods and services in volume terms increased by 5.6 per cent and Imports of goods and services declined by 0.7 per cent.

Chart 3. Expenditure, main components

growth rates, volume terms, year-on-year

Table 3. Expenditure, contributions to GDP growth in volume terms

		Q3 2022	Q4 2022	Q1 2023	Q2 2023	Q3 2023
Final consumption expenditure	p.p.	4.4	2.4	4.1	2.5	3.4
Private	p.p.	4.0	2.9	3.7	3.2	3.3
Government	p.p.	0.5	-0.5	0.4	-0.7	0.2
Gross capital formation	p.p.	6.9	8.8	-3.4	-4.3	-6.8
Fixed assets	p.p.	6.8	8.7	-3.5	-4.5	-6.7
Inventories and valuables	p.p.	0.1	0.1	0.1	0.2	-0.1
Exports of goods and services	p.p.	15.9	3.9	16.5	19.5	9.4
Imports of goods and services	p.p.	20.8	7.8	10.8	11.7	-1.0

Note: Contributions may not add up due to rounding.

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 the third quarter of 2022, the €610.2 million increase in nominal GDP was the result of a €184.0 million increase in Compensation of employees, a €260.6 million rise in Gross operating surplus and mixed income, and an increase of €165.6 million in Net taxation on production and imports.

Chart 4. Compensation of employees

growth rates, nominal terms, year-on-year

Table 4. Income, contributions to GDP growth in nominal terms

		Q3 2022	Q4 2022	Q1 2023	Q2 2023	Q3 2023
Compensation of employees	p.p.	3.8	5.6	4.8	3.8	4.0
Agriculture & fishing	p.p.	0.0	0.0	0.0	0.0	0.0
Industry	p.p.	0.5	0.5	0.5	0.4	0.3
Services	p.p.	3.3	5.1	4.3	3.4	3.7
Gross operating surplus and mixed income	p.p.	9.1	9.1	6.3	8.6	5.7
Taxes less subsidies on production	p.p.	-0.2	-0.8	1.4	-0.3	3.6

Note: Contributions may not add up due to rounding.

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 the third quarter of 2023 was estimated at €4,758.6 million.

Additional Tables and Charts

Table 5. GDP identity from the production (output) side at market prices by period

Table 6. GDP identity from the production (output) side in chain-linked volumes by period (reference year 2015)

Table 7. GDP identity from the expenditure side at market prices by period

Table 8. GDP identity from the expenditure side in chain-linked volumes by period (reference year 2015)

Table 9. GDP identity from the income side by period

All Tables

Methodological Notes

1. The Gross Domestic Product for the second quarter of 2023 has been subject to an ad-hoc revision in national accounts data. Ad hoc revisions result mostly from the incorporation of new data sources to replace past estimates with more robust figures, and methodological improvements, which may cause more significant changes than those carried out in routine revisions. The results of 2018 are now considered definitive until the next benchmark revision.

Due to these modifications, it is not possible to compare the data in this news release with figures previously published.

2. 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’

3. Data in this news release is unadjusted. Seasonally adjusted data is available in the table (namq_10_gdp) accessible here.

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 2019 to date.

7. 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 2015. 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.

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. The GNI Inventory and the process tables are available online.

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

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

11. A detailed news release calendar is available online.

12. For guidance on access and re-use of data please visit our dedicated webpage.

13. For further assistance send your request through our online request form.

Gross Domestic Product: Q3/2023

NR214/2023

Release Date: 28 November 2023

Cut off Date: 23 November 2023

In 2023 Q3, Gross Domestic Product (GDP) rose by 7.1 per cent in volume terms.
Final domestic demand contributed negatively to GDP growth (3.4 percentage points) due to negative growth in Gross fixed capital formation.
Conversely, foreign trade contributed positively to GDP growth (10.5 percentage points) attributable to an increase in Exports of goods and services and a decrease in Imports of goods and services.

News Releases

Table 1. Selected indicators

Chart 1. Gross Domestic Product

Chart 2. Gross value added

Table 2. Production, contributions to GDP growth in volume terms

Chart 3. Expenditure, main components

Table 3. Expenditure, contributions to GDP growth in volume terms

Chart 4. Compensation of employees

Table 4. Income, contributions to GDP growth in nominal terms

Additional Tables and Charts

Methodological Notes