GDP growth slows in first quarter of the year

Malta's economic growth moderated in the first quarter of this year compared to the same period last year, according to gross domestic product (GDP) figures issued by the National Statistics Office.

The GDP for the first quarter this year amounted to €4.3 billion, according to provisional estimates.

Graphic: NSO

In volume terms, GDP rose by 3.1% in Q1, compared to 8.3% in the first quarter of last year. When calculated in nominal terms, GDP rose by 9.1% compared to  12.1% in the first three months of last year.

Nominal calculations reflect GDP at current market prices and are therefore strongly impacted by high rates of inflation. 

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

Graphic: NSO

This represents a decrease of 0.3 percentage points in comparison to the year-on-year rate recorded in the fourth quarter of 2022.

Final domestic demand contributed negatively to GDP growth (2.2 percentage points) due to negative growth in gross fixed capital formation.

Conversely, foreign trade contributed positively to GDP growth (5.4 percentage points) attributable to a lower drop in exports of goods and services compared to imports of goods and services.

Prime Minister Robert Abela hailed the results.

"During the first quarter of this year, the Maltese economy grew at two and a half times the EU average," he wrote, attributing that performance to the government's decision to absorb energy price increases. 

The European Commission and International Monetary Fund have both advised Malta to wind down its energy subsidies and use that money to pay off debt instead.  

Correction May 30, 2023: A previous version stated that GDP rose by 9.1%. That figure represents nominal growth during the period.