The economy contracted by 5.7% last year, a year characterised by the COVID-19 pandemic, official figures issued on Monday show. That is a better performance than a projected drop of 7.4 per cent which had been projected in the Budget speech.
The National Statistics Office said provisional figures showed GDP amounted to €12,823.8 million, a decrease of €768.4 million, or 5.7 per cent, when compared to 2019. In volume terms, GDP fell by 7.0 per cent.
The GDP blow was felt mostly in the services sector, notably tourism, accommodation and restaurants, while construction was among the best performers.
The production approach
During 2020, Gross Value Added (GVA) fell by 4.3 per cent in nominal terms and 5.8 per cent in volume terms, when compared to 2019.
This contraction in GVA was mainly due to a drop of 6.7 per cent in Services and Agriculture and fishing which declined by 1.0 per cent and 10.7 per cent, respectively. An increase of 2.9 per cent was registered in construction.
The drop in services was mainly driven by accommodation and food service
activities (-64.7 per cent); transportation and storage activities (-43.1 per cent); wholesale and retail trade activities (-9.9 per cent); and administrative and support services activities (-10.7 per cent).
Services activities which contributed positively to GVA included information and communication activities (13.6 per cent); Arts, entertainment, and recreation activities (10.0 per cent); Financial and insurance activities (3.9 per cent); and Public administration (5.5 per cent)1
.
Net taxes on products contributed negatively towards GDP growth with a decline of 17.1 per cent in volume terms.
The expenditure approach
During 2020, Total final consumption expenditure witnessed an increase of 0.4 per cent in nominal terms and a drop of 1.1 per cent in volume terms. The latter was the result of a decrease in household expenditure of 7.9 per cent, which was partly offset by an increase in the expenditure of Non-profit institutions serving households of 3.5 per cent and a rise in General government expenditure of 16.1
per cent.
Gross fixed capital formation (GFCF) declined by 3.6 per cent in nominal terms and 4.5 per cent in volume terms. The drop in GFCF was mainly triggered by a decrease of 15.7 per cent in Dwellings and a drop of 25.0 per cent in Machinery and equipment in volume terms.
Exports of goods and services fell by 7.3 per cent in nominal terms and 7.8 per cent in volume terms. Moreover, Imports of goods and services declined by 3.7 per cent in nominal terms and 4.1 per cent in volume terms.
The income approach
Compared to 2019, the €768.4 million decrease in GDP in nominal terms was primarily a result of a €137.8 million increase in compensation of employees, a €216.8 million decline in gross operating surplus and mixed income, and
a drop of €689.4 million in net taxation on production and imports.
