Abstract
This 2007 Article IV Consultation highlights that Malta’s economic recovery is gaining traction, owing in large part to cyclical strength and some structural change. A public investment boom, financed largely by grants from the European Union, reignited growth in 2005. A modest recovery in exports and robust consumption growth, supported by rising employment and household borrowing, helped sustain the upswing in 2006. Although financial stability has continued to improve, the concentration of loan portfolios in real estate has continued to rise. Although nonperforming loans declined further, levels remain high and provisioning uneven.
Appendix I. Malta: Fund Relations
(As of April 30, 2007)
Mission: Valetta, May 17-28, 2007
Staff team: Messrs. Odenius (head), Chelsky, Danninger, (all EUR) and Perrelli (FIN). Mr. Landi (Advisor to the Executive Director) also attended most meetings.
Country interlocutors: The mission met with the Bank of Malta Governor, Mr. Michael Bonello; the Parliamentary Secretary to the Minister of Finance, Mr. Tonio Fenech; other senior officials; employers and labor unions; opposition and private sector representatives.
Data: Malta participates in the Fund’s General Data Dissemination System.
I. Membership Status: Malta became a member of the Fund on September 11, 1968. It eliminated all remaining restrictions under Article XIV of the Articles of Agreement, and accepted the obligations of Article VIII (Sections 2, 3, and 4) of the Articles of Agreement on November 30, 1994. Malta maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions, except for restrictions maintained for security reasons and which have been notified to the Fund pursuant to Executive Board Decision No. 144-(52/51).
II. General Resources Account:
| SDR Million | Percent Quota | |
|---|---|---|
| Quota | 102.00 | 100.00 |
| Fund holdings of currency | 61.74 | 60.53 |
| Reserve position in Fund | 40.26 | 39.47 |
| SDR Million | Percent Quota | |
|---|---|---|
| Quota | 102.00 | 100.00 |
| Fund holdings of currency | 61.74 | 60.53 |
| Reserve position in Fund | 40.26 | 39.47 |
III. SDR Department:
| SDR Million | Percent Allocation | |
|---|---|---|
| Net cumulative allocation | 11.29 | 100.00 |
| Holdings | 34.63 | 306.79 |
| SDR Million | Percent Allocation | |
|---|---|---|
| Net cumulative allocation | 11.29 | 100.00 |
| Holdings | 34.63 | 306.79 |
IV. Outstanding Purchases and Loans: None
V. Latest Financial Arrangements: None
VI. Projected Payments to the Fund: None
VII. Exchange Rate Arrangement and Restrictions: Malta participates in the ERM II. The Maltese lira is currently pegged to the euro in a conventional peg arrangement. The central rate of the lira vis-à-vis the euro is Lm 0.429300 per €1. Malta maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions, except for restrictions maintained for security reasons and which have been notified to the Fund pursuant to Executive Board Decision No. 144- (52/51).
VIII. Article IV Consultation: The last Article IV consultation was concluded on October 14, 2005. Malta is on a 24-month consultation cycle.
IX. Technical Assistance: (1999-present)
ROSC Data Module mission visited Malta in June 2007.
An expert visited Valetta in November 2006 and again in April 2007 to assist with the preparation of a producer price index.
FSAP missions in October 2002, and January 2003.
STA mission on money and banking statistics visited Malta in March 2001.
An MAE mission addressed monetary operations and liquidity forecasting (February 1999).
X. Resident Representative: None.
Appendix II. Malta: Statistical Issues
Data provision is adequate for surveillance purposes. The 2006 IMF Report on the Observance of Standards and Codes finds that Malta has made significant progress in improving its macroeconomic statistics. The National Statistics Office (NSO) was created in March 2001 as an autonomous and independent institution, superseding the Central Office of Statistics (COS). The NSO is in the process of developing procedures to ensure its coordinating role, as required by the Statistical Act 2000. The authorities have been in close contact with the ECB and Eurostat to upgrade their statistical systems to meet euro-area standards, and most of Malta’s statistics can be accessed through Eurostat. Malta has been a participant in the GDDS since September 11, 2000, and the authorities are taking steps to subscribe to the SDDS. Data are posted on the Fund’s Dissemination Bulletin Board on the Internet. http://dsbb.imf.org/Applications/web/gdds/gddscountrycategorylist/?strcode=MLT
Real sector data: Data on retail prices, labor market indicators, and tourism arrivals are released monthly, usually with a short lag; access to these data is available through the Internet via NSO’s web site. The NSO completed the project to improve the coverage of GDP in accordance with ESA95,with estimates published on the NSO web site, with a three- month lag, since August 2004. Past data going back to 1995 were recently revised based on this methodology. Volume GDP estimates by type of economic activity are not available. Work is underway to prepare a producer price index which will enable the authorities to produce constant price output data by sector. Separate deflators for goods and services exports and imports are not available. The harmonized index of consumer prices (HICP) was first published in May 2004.
Fiscal data: Fiscal statistics are timely and of a high quality. The NSO published monthly statistics on the cash operations of the central government in line with the guidelines set out in the European System of Accounts (ESA95)Manual on Government Deficit and Debt. In addition, quarterly general government account are published on accrual basis in accordance with the ESA95methodological framework. The general government comprises data from the consolidated fund of government adjusted to include other accounts of government, the accruals elements, and the financial performance of the Extra Budgetary Units (EBUs) and of the Local Councils. Malta has no extrabudgetary funds.
Money and Banking Statistics: Monetary statistics are timely and of good quality. Malta participates in the Fund initiative to publish Financial Soundness indicators: http://www.imf.org/external/np/sta/fsi/part.asp?iso=MLT
External sector:Nonrecording of the transactions of special purpose entities is a factor behind the large errors and omissions. Summary data (merchandise trade, current account balance, and selected capital account data) are released on a quarterly basis with a lag of about three months. More detailed BOP data, as well as those on the international investment position, are released annually, the latter with a lag sometimes exceeding one year. Summary trade statistics arereleased monthly with a lag of about 40 days.
Malta: Table of Common Indicators Required for Sirveillance
(As of June 14, 2007)
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Reflects the assessment provided in the data ROSC (published on August 18, 2006, and based on the findings of the mission that took place during June 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment, and revision studies
Malta: Table of Common Indicators Required for Sirveillance
(As of June 14, 2007)
| Date of latest observation | Date received | Frequency of Data6 | Frequency of Reporting6 | Frequency of Publication6 | Memo Items: | ||
|---|---|---|---|---|---|---|---|
| Data Quality - Methodo- logical soundness7 | Data Quality - Accuracy and reliability8 | ||||||
| Exchange Rates | 6/14/07 | 6/14/07 | D | D | D | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 5/07 | 6/07 | M | M | M | ||
| Reserve/Base Money | 6/07 | 6/07 | M | M | M | ||
| Broad Money | 6/07 | 6/07 | M | M | M | ||
| Central Bank Balance Sheet | 4/07 | 4/07 | M | M | M | ||
| Consolidated Balance Sheet of the Banking System | 12/06 | 7/07 | M | M | Q | ||
| Interest Rates2 | 5/07 | 5/07 | W | W | W | ||
| Consumer Price Index | 5/07 | 6/14 | M | M | M | O/LO | O/LO |
| Revenue, Expenditure, Balance and Composition of Financing3 - General Government4 | 5/07 | 6/07 | M | M | M | O/LO | O/LO |
| Revenue, Expenditure, Balance and Composition of Financing3- Central Government | 5/07 | 6/07 | M | M | M | O/LO | O/LO |
| Stocks of Central Government and Central Government- Guaranteed Debt5 | 5/07 | 6/07 | M | M | M | ||
| External Current Account Balance | 2007: Q1 | 6/07 | Q | Q | Q | O/LO | O/LO/LNO |
| Exports and Imports of Goods and Services | 2007: Q1 | 6/07 | Q | Q | Q | O/LO | O/LO/LNO |
| GDP/GNP | 2007: Q1 | 6/07 | Q | Q | Q | O/LO/LNO | O/LO |
| Gross External Debt | n/a | n/a | n/a | n/a | n/a | ||
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Reflects the assessment provided in the data ROSC (published on August 18, 2006, and based on the findings of the mission that took place during June 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment, and revision studies
Malta: Table of Common Indicators Required for Sirveillance
(As of June 14, 2007)
| Date of latest observation | Date received | Frequency of Data6 | Frequency of Reporting6 | Frequency of Publication6 | Memo Items: | ||
|---|---|---|---|---|---|---|---|
| Data Quality - Methodo- logical soundness7 | Data Quality - Accuracy and reliability8 | ||||||
| Exchange Rates | 6/14/07 | 6/14/07 | D | D | D | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 5/07 | 6/07 | M | M | M | ||
| Reserve/Base Money | 6/07 | 6/07 | M | M | M | ||
| Broad Money | 6/07 | 6/07 | M | M | M | ||
| Central Bank Balance Sheet | 4/07 | 4/07 | M | M | M | ||
| Consolidated Balance Sheet of the Banking System | 12/06 | 7/07 | M | M | Q | ||
| Interest Rates2 | 5/07 | 5/07 | W | W | W | ||
| Consumer Price Index | 5/07 | 6/14 | M | M | M | O/LO | O/LO |
| Revenue, Expenditure, Balance and Composition of Financing3 - General Government4 | 5/07 | 6/07 | M | M | M | O/LO | O/LO |
| Revenue, Expenditure, Balance and Composition of Financing3- Central Government | 5/07 | 6/07 | M | M | M | O/LO | O/LO |
| Stocks of Central Government and Central Government- Guaranteed Debt5 | 5/07 | 6/07 | M | M | M | ||
| External Current Account Balance | 2007: Q1 | 6/07 | Q | Q | Q | O/LO | O/LO/LNO |
| Exports and Imports of Goods and Services | 2007: Q1 | 6/07 | Q | Q | Q | O/LO | O/LO/LNO |
| GDP/GNP | 2007: Q1 | 6/07 | Q | Q | Q | O/LO/LNO | O/LO |
| Gross External Debt | n/a | n/a | n/a | n/a | n/a | ||
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Reflects the assessment provided in the data ROSC (published on August 18, 2006, and based on the findings of the mission that took place during June 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).
Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment, and revision studies