Malta’s trade deficit widened significantly last year, reaching close to €8.6 billion, according to national data.
The National Statistics Office attributed that widening primarily to the rising prices of goods.
Data released by the NSO shows how Malta's exports have been steadily climbing over the past years, despite a COVID-19 hiccup. Malta exported just over €4.5 billion worth of goods in 2023, an 18.5 per cent increase over 2019.
Imports were also up over the past years. In 2023 they reached just under €8.6 billion (€8,577.5 million), compared to just under €7.6 billion in 2019.
The NSO report sheds light on the way in which major global events such as Brexit, the COVID-19 pandemic, and the war in Ukraine significantly influenced Malta’s trade dynamics.
These events affected trade volumes, trade partners, and the overall trade landscape.
Germany and Italy are Malta's two biggest trading partners, the data shows.
Malta relies especially heavily on Italy when it comes to importing goods - almost €1.7 billion worth of goods were imported from the country in 2023.
Italy was also Malta's largest source of imports in 2015, a reference year the NSO used for comparative purposes.
Trading relations with Germany have increased in scope significantly over that time period: the country is now Malta's single largest export market (€846.7 million in 2023) and also accounted for €672.3 million in imports, second only to Italy.
Trading partners have shifted somewhat over the past nine years: countries like South Korea, Greece, Azerbaijan and Turkmenistan all rank among our top 15 import partners when they did not rank highly in 2015.
Conversely, Turkey, Canada and Russia have all become less relevant to Malta, import-wise. All three were among our top importing partners in 2015 but no longer feature on the leaderboard.
In terms of export partners, Malta has deepened its trade relations with Spain, Ghana, Croatia, the Netherlands and Poland, which all feature on its top list of exporting countries.
The single biggest loser in terms of exports is Egypt: in 2015 it was Malta's biggest export partner, receiving €466.3 million in Maltese goods. Last year, Maltese exports only reached €24.7 million.
Hong Kong is also less relevant to Maltese exporters than it used to be: exports totalled €171.5 million in 2015 but are now just over a tenth of that amount (€18.7 million).
Malta's trading relationship with the United Kingdom has also shifted, post-Brexit.
Import sectors from the country have shifted, with trade in many sectors registering minimal growth while imports of mineral fuels, oils and related products ballooned from under €1 million in 2015 to €47 million last year.
Exports to the UK declined over that time period, from just over €141 million to €100 million. Exports of vehicles/vehicle parts and of pharmaceuticals were the worst hit.
The Euro continues to be Malta's primary trading currency, though the US Dollar and Pound Sterling were also used, particularly due to Northern Ireland’s status.
What does Malta export?
Manufacturing is Malta's largest export sector, accounting for €2.13 billion worth of exports in 2023. It has been the country's largest export sector since 2019, when it overtook wholesale and retail trade and the repair of vehicles and motorcycles to capture the top spot.
Together, those two sectors accounted for 82 per cent of all Malta's exports last year.
The transportation and storage sector has grown eightfold since 2018 and now accounts for €330 million in exports, and exports of financial and insurance activities increased by a factor of five to reach just under €12 million last year when compared to 2018.
The fastest-growing export sector, however, is in the export of administrative and support service activities.
In 2018, exports of that sector amounted to just €1 million. Last year, they totalled €62.3 million.
COVID-19 impact
The pandemic caused a dip in imports, particularly in 2020. But by 2023, sectors like mineral fuels, oils, and products had recovered and even surpassed pre-pandemic levels in terms of value - although this was partly due to price increases rather than volume growth, the NSO noted.
Small and medium-sized enterprises played a crucial role in Malta’s trade, contributing significantly to both imports and exports.
The top 1,000 enterprises dominated imports, while the top 500 enterprises accounted for a major portion of exports.
Fluctuating trade volumes
Both imports and exports showed fluctuations between 2018 and 2023, with some sectors experiencing growth while others saw declines.
These changes were influenced by global economic conditions and specific trade chapters, the NSO said.