Abstract
Malta weathered the global recession relatively well. Real estate prices and collateral values experienced some correction and appear to have stabilized more recently, but excess supply likely remains in segments of the market. Continued progress with structural reforms will also be important to establish high value exports and to raise productivity and employment rates. Further pension reform will help avoid age-related public spending. Measures to enhance the education system and encourage women and older workers to participate in the labor market will be important to raise employment.
APPENDIX I. Malta: Fund Relations
(As of November 30, 2010)
I. Membership Status: Joined: September 11, 1968; Article VIII
II. General Resources Account:
| SDR Million | Percent Quota | |
| Quota | 102.00 | 100.00 |
| Fund holdings of currency | 81.18 | 79.59 |
| Reserve Tranche Position | 20.82 | 20.41 |
| SDR Million | Percent Quota | |
| Quota | 102.00 | 100.00 |
| Fund holdings of currency | 81.18 | 79.59 |
| Reserve Tranche Position | 20.82 | 20.41 |
III. SDR Department:
| SDR Million | Percent Allocation | |
| Net cumulative allocation | 95.40 | 100.00 |
| Holdings | 95.85 | 100.47 |
| SDR Million | Percent Allocation | |
| Net cumulative allocation | 95.40 | 100.00 |
| Holdings | 95.85 | 100.47 |
IV. Outstanding Purchases and Loans: None
V. Financial Arrangements: None
VI. Projected Obligations to Fund (SDR million; based on existing use of resources and present holdings of SDRs):
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2010 | 2011 | 2012 | 2013 | 2014 | |
| Principal | |||||
| Charges/Interest | 0.00 | 0.00 | 0.00 | 0.00 | |
| Total | 0.00 | 0.00 | 0.00 | 0.00 | |
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2010 | 2011 | 2012 | 2013 | 2014 | |
| Principal | |||||
| Charges/Interest | 0.00 | 0.00 | 0.00 | 0.00 | |
| Total | 0.00 | 0.00 | 0.00 | 0.00 | |
VII. Exchange Rate Arrangement: Member of the euro area since January 1, 2008.
VIII. Article IV Consultation: Malta is on the standard 12-month consultation cycle. The previous consultation discussions took place during June 11-22, 2009, and the staff report (Country Report No.09/287, 09/04/09) was discussed on September 4, 2009.
IX. Technical Assistance:
| Date | Department | Subject |
|---|---|---|
| April 2009 | STA | SDDS subscription finalization |
| November 2006, April and December 2007 | STA | Producer price index/SDDS preparations (expert visits) |
| June 2005 | STA | ROSC Data Module |
| October 2002-January 2003 | MFD | FSAP missions (joint with World Bank) |
| March 2001 | STA | Money and banking statistics |
| February 1999 | MAE | Monetary operations and liquidity forecasting |
| Date | Department | Subject |
|---|---|---|
| April 2009 | STA | SDDS subscription finalization |
| November 2006, April and December 2007 | STA | Producer price index/SDDS preparations (expert visits) |
| June 2005 | STA | ROSC Data Module |
| October 2002-January 2003 | MFD | FSAP missions (joint with World Bank) |
| March 2001 | STA | Money and banking statistics |
| February 1999 | MAE | Monetary operations and liquidity forecasting |
X. Resident Representative: None.
APPENDIX II. Malta: Statistical Information
(As of December 22, 2010)
Data provision is adequate for surveillance purposes. Significant progress in improving macroeconomic statistics has been made in close cooperation with the European Central Bank (ECB) and Eurostat while upgrading statistical systems to meet the euro area standards.1 However, national accounts and balance of payments data have remained subject to substantial revisions, often affecting several years. Most macroeconomic statistics can now be accessed through Eurostat. The country has been a participant in the GDDS since September 11, 2000, with the metadata posted on the IMF’s Dissemination Standards Bulletin Board.
Real sector statistics: Data on retail and consumer prices, labor market indicators, and tourism arrivals are released monthly, usually with a short lag. These data are available through Eurostat and via the Internet at the Central Bank of Malta (CBM) and the National Statistical Office (NSO) websites. Presently the NSO releases national accounts data in euros with one quarter lag. Statistical discrepancies (captured under stock building) are often large, particularly on the first release, and typically lead to sizable revisions. Supply-side GDP estimates by type of economic activity are not available, but the recently published producer price index will facilitate their compilation. National accounts imports and exports data are not disaggregated into goods and services. The harmonized index of consumer prices was first published in May 2004.
Government finance statistics: Fiscal statistics meet basic requirements, with quarterly accrual-based data on general government operations compiled in accordance with the ESA95 methodology and disseminated with a one-quarter lag. 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 and of the Local Councils. The NSO also publishes monthly statistics on the cash operations of the central government, for which the authorities plan to utilize the targeted timeliness flexibility option in light of additional time required for the final month of the fiscal year.
Monetary and financial statistics: Monetary statistics are timely and of good quality. Since the entry into the euro area in January 2008, monetary data for IMF statistical publications are now obtained through a gateway arrangement with the ECB, thus reducing the reporting burden of the country. The country participated in the pilot project—Coordinated Compilation Exercise—for Financial Soundness Indicators and submitted indicators as of end-2005 along with metadata, which are now available to the public through the IMF’s website (http://www.imf.org/external/np/sta/fsi/part.asp?iso=MLT).
External sector statistics: Summary data (merchandise trade, current account balance, and selected financial account data) are released on a quarterly basis with a lag of about three months. More detailed BOP and IIP data are released annually, the latter with a lag sometimes exceeding one year. Summary trade statistics are released monthly with a lag of about 40 days.
Malta: Table of Common Indicators Required for Surveillance
(As of Dec 15, 2010)
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.
Includes external gross financial asset and liability positions vis a vis nonresidents.
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 Surveillance
(As of Dec 15, 2010)
| Date of latest observation | Date received | Frequency of Data6 | Frequency of Reporting6 | Frequency of Publication6 | Memo Items: | ||
|---|---|---|---|---|---|---|---|
| Data Quality-Methodological soundness7 | Data Quality-Accuracy and reliability8 | ||||||
| Exchange Rates | Current | Current | D | D | D | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 10/10 | 12/10 | M | M | M | ||
| Central Bank Balance Sheet | 10/10 | 12/10 | M | M | M | … | … |
| Consolidated Balance Sheet of the Banking System | 10/10 | 12/10 | M | M | Q | … | … |
| Interest Rates2 | 10/10 | 12/10 | M | M | M | ||
| Consumer Price Index | 10/10 | 11/10 | M | M | M | O, LO, O, O | O, O, LO, LO, O |
| Revenue, Expenditure, Balance and Composition of Financing3 - General Government4 | 2010:Q2 | 11/10 | Q | Q | Q | O, LO, O, LO | O, O, O, LO, O |
| Revenue, Expenditure, Balance and Composition of Financing3- Central Government | 4/10 | 6/10 | M | M | M | ||
| Stocks of General Government and General Government-Guaranteed Debt5 | 2009:Q1 | 7/09 | Q | Q | Q | ||
| External Current Account Balance | 2010:Q1 | 7/10 | Q | Q | Q | O, LO, O, O | LO, O, O, O, LNO |
| Exports and Imports of Goods and Services | 2010:Q1 | 7/10 | Q | Q | Q | ||
| GDP/GNP | 2010:Q3 | 12/10 | Q | Q | Q | O, LNO, O, LO | LO, O, LO, LO, LO |
| Gross External Debt | 2009:Q1 | 7/09 | Q | Q | Q | ||
| International Investment Position6 | 2009 | 8/10 | A | A | 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.
Includes external gross financial asset and liability positions vis a vis nonresidents.
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 Surveillance
(As of Dec 15, 2010)
| Date of latest observation | Date received | Frequency of Data6 | Frequency of Reporting6 | Frequency of Publication6 | Memo Items: | ||
|---|---|---|---|---|---|---|---|
| Data Quality-Methodological soundness7 | Data Quality-Accuracy and reliability8 | ||||||
| Exchange Rates | Current | Current | D | D | D | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 10/10 | 12/10 | M | M | M | ||
| Central Bank Balance Sheet | 10/10 | 12/10 | M | M | M | … | … |
| Consolidated Balance Sheet of the Banking System | 10/10 | 12/10 | M | M | Q | … | … |
| Interest Rates2 | 10/10 | 12/10 | M | M | M | ||
| Consumer Price Index | 10/10 | 11/10 | M | M | M | O, LO, O, O | O, O, LO, LO, O |
| Revenue, Expenditure, Balance and Composition of Financing3 - General Government4 | 2010:Q2 | 11/10 | Q | Q | Q | O, LO, O, LO | O, O, O, LO, O |
| Revenue, Expenditure, Balance and Composition of Financing3- Central Government | 4/10 | 6/10 | M | M | M | ||
| Stocks of General Government and General Government-Guaranteed Debt5 | 2009:Q1 | 7/09 | Q | Q | Q | ||
| External Current Account Balance | 2010:Q1 | 7/10 | Q | Q | Q | O, LO, O, O | LO, O, O, O, LNO |
| Exports and Imports of Goods and Services | 2010:Q1 | 7/10 | Q | Q | Q | ||
| GDP/GNP | 2010:Q3 | 12/10 | Q | Q | Q | O, LNO, O, LO | LO, O, LO, LO, LO |
| Gross External Debt | 2009:Q1 | 7/09 | Q | Q | Q | ||
| International Investment Position6 | 2009 | 8/10 | A | A | 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.
Includes external gross financial asset and liability positions vis a vis nonresidents.
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.
APPENDIX III. Malta: Public Sector Debt Sustainability
Fiscal Sustainability
General government debt has increased from 61.3 percent of GDP in 2007 to 67.7 percent in 2009 as a result of the deterioration in the fiscal position. Under the baseline scenario, the debt ratio is expected to remain at 67.8 percent of GDP in 2010, reflecting the contained primary deficit (0.8 percent of GDP). In the medium term, the primary deficit is expected to turn into surplus through continued fiscal consolidation efforts and economic growth, stabilizing the debt ratio at about 67.2 percent of GDP in 2015.
The debt sustainability analysis illustrates the importance of continued fiscal consolidation. Under a scenario where the primary balance is kept constant at the 2009 level, general government debt would reach 80.4 percent of GDP in 2015. The sustainability of the fiscal position is only marginally sensitive to exogenous macroeconomic shocks, as indicated by the bound tests (Figure 1).
Malta: Public Debt Sustainability: Bound Tests 1/
(Public debt in percent of GDP)
Citation: IMF Staff Country Reports 2011, 029; 10.5089/9781455213870.002.A002
Sources: International Monetary Fund, country desk data, and staff estimates.1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Ten-year historical average for the variable is also shown.2/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and primary balance.3/ One-time real depreciation of 30 percent and 10 percent of GDP shock to contingent liabilities occur in 2009, with real depreciation defined as nominal depreciation (measured by percentage fall in dollar value of local currency)minus domestic inflation (based on GDP deflator).Malta: Public Debt Sustainability: Bound Tests 1/
(Public debt in percent of GDP)
Citation: IMF Staff Country Reports 2011, 029; 10.5089/9781455213870.002.A002
Sources: International Monetary Fund, country desk data, and staff estimates.1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Ten-year historical average for the variable is also shown.2/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and primary balance.3/ One-time real depreciation of 30 percent and 10 percent of GDP shock to contingent liabilities occur in 2009, with real depreciation defined as nominal depreciation (measured by percentage fall in dollar value of local currency)minus domestic inflation (based on GDP deflator).Malta: Public Debt Sustainability: Bound Tests 1/
(Public debt in percent of GDP)
Citation: IMF Staff Country Reports 2011, 029; 10.5089/9781455213870.002.A002
Sources: International Monetary Fund, country desk data, and staff estimates.1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Ten-year historical average for the variable is also shown.2/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and primary balance.3/ One-time real depreciation of 30 percent and 10 percent of GDP shock to contingent liabilities occur in 2009, with real depreciation defined as nominal depreciation (measured by percentage fall in dollar value of local currency)minus domestic inflation (based on GDP deflator).The analysis presented in this appendix is based on public debt figures excluding government guarantees. Government guaranteed debt amounted to 15 percent of GDP as of June 2010, of which 6 percent relates to Enemalta debt. According to ESA 95, as long as the guarantee is not called, it is a contingent liability, recorded off-balance sheet.
Malta: Public Sector Debt Sustainability Framework, 2005-2015
(In percent of GDP, unless otherwise indicated)
General government gross debt.
Derived as [(r - p(1+g) - g + ae(1+r)]/(1+g+p+gp)) times previous period debt ratio, with r = interest rate; p = growth rate of GDP deflator; g = real GDP growth rate; a = share of foreign-currency denominated debt; and e = nominal exchange rate depreciation (measured by increase in local currency value of U.S. dollar).
The real interest rate contribution is derived from the denominator in footnote 2/ as r - n (1 +g) and the real growth contribution as -g.
The exchange rate contribution is derived from the numerator in footnote 2/ as ae(1+r).
Defined as public sector deficit, plus amortization of medium and long-term public sector debt, plus short-term debt at end of previous period.
Derived as nominal interest expenditure divided by previous period debt stock.
The key variables include real GDP growth; real interest rate; and primary balance in percent of GDP.
The implied change in other key variables under this scenario is discussed in the text.
Real depreciation is defined as nominal depreciation (measured by percentage fall in dollar value of local currency) minus domestic inflation (based on GDP deflator).
Assumes that key variables (real GDP growth, real interest rate, and other identified debt-creating flows) remain at the level of the last projection year.
Malta: Public Sector Debt Sustainability Framework, 2005-2015
(In percent of GDP, unless otherwise indicated)
| Actual | Projections | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |||||
| I. Baseline Projections | Debt-stabilizing primary balance 10/ | ||||||||||||||
| Public sector debt 1/ | 69.5 | 63.2 | 61.3 | 62.6 | 67.7 | 67.8 | 68.0 | 68.1 | 67.9 | 67.5 | 67.2 | 0.3 | |||
| o/w foreign-currency denominated | 0.3 | 0.2 | 0.1 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Public debt plus guarantees | 82.2 | 74.0 | 72.3 | 74.4 | 82.6 | 82.7 | 83.0 | 83.1 | 82.9 | 82.6 | 82.3 | ||||
| Change in public sector debt | -2.8 | -6.4 | -1.8 | 1.2 | 5.1 | 0.1 | 0.2 | 0.1 | -0.2 | -0.4 | -0.4 | ||||
| Identified debt-creating flows (4+7+12) | -2.0 | -2.8 | -5.0 | 1.2 | 3.4 | 0.0 | 0.3 | 0.1 | -0.2 | -0.4 | -0.4 | ||||
| Primary deficit | -0.7 | -0.8 | -1.0 | 1.5 | 0.6 | 0.8 | -0.2 | -0.2 | -0.4 | -0.7 | -0.7 | ||||
| Revenue and grants | 41.6 | 40.9 | 39.9 | 39.7 | 39.6 | 39.3 | 39.3 | 39.3 | 39.3 | 39.0 | 39.0 | ||||
| Primary (noninterest) expenditure | 40.9 | 40.1 | 38.9 | 41.1 | 40.2 | 40.1 | 39.1 | 39.2 | 38.9 | 38.3 | 38.3 | ||||
| Automatic debt dynamics 2/ | -1.2 | -0.9 | -0.8 | 0.2 | 2.8 | -0.7 | 0.4 | 0.3 | 0.2 | 0.3 | 0.3 | ||||
| Contribution from interest rate/growth differential 3/ | -1.3 | -0.9 | -0.8 | 0.2 | 2.8 | -0.7 | 0.4 | 0.3 | 0.2 | 0.3 | 0.3 | ||||
| Of which contribution from real interest rate | 1.9 | 1.2 | 1.5 | 1.8 | 1.6 | 1.2 | 1.7 | 1.6 | 1.5 | 1.6 | 1.6 | ||||
| Of which contribution from real GDP growth | -3.2 | -2.1 | -2.3 | -1.6 | 1.2 | -2.0 | -1.3 | -1.3 | -1.3 | -1.3 | -1.3 | ||||
| Contribution from exchange rate depreciation 4/ | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Other identified debt-creating flows | 0.0 | -1.1 | -3.1 | -0.5 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Privatization receipts (negative) | 0.0 | -1.1 | -3.1 | -0.5 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Recognition of implicit or contingent liabilities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Other (specify, e.g. bank recapitalization) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Residual, including asset changes (2-3) | -0.8 | -3.6 | 3.2 | 0.0 | 1.8 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Public sector debt-to-revenue ratio 1/ | 167.1 | 154.6 | 153.6 | 157.7 | 171.0 | 172.4 | 173.0 | 173.3 | 172.9 | 173.0 | 172.2 | ||||
| Gross financing need 5/ | 14.5 | 13.3 | 12.5 | 15.1 | 15.0 | 15.1 | 14.3 | 14.3 | 13.9 | 13.7 | 13.6 | ||||
| in billions of U.S. dollars | 0.9 | 0.9 | 0.9 | 1.3 | 1.2 | 1.2 | 1.2 | 1.3 | 1.3 | 1.3 | 1.4 | ||||
| Key Macroeconomic and Fiscal Assumptions | Projected Average | ||||||||||||||
| Real GDP growth (in percent) | 4.7 | 3.3 | 3.9 | 2.7 | -1.9 | 3.1 | 2.0 | 2.0 | 2.0 | 2.0 | 2.0 | 2.2 | |||
| Average nominal interest rate on public debt (in percent) 6/ | 5.5 | 5.4 | 5.6 | 5.6 | 5.1 | 4.8 | 4.8 | 4.8 | 4.6 | 4.7 | 4.7 | 4.7 | |||
| Average real interest rate (nominal rate minus change in GDP deflator, in percent) | 2.9 | 2.0 | 2.6 | 3.1 | 2.5 | 2.0 | 2.6 | 2.5 | 2.4 | 2.5 | 2.5 | 2.4 | |||
| Nominal appreciation (increase in US dollar value of local currency, in percent) | -10.9 | 11.0 | 11.8 | -7.5 | 7.2 | -4.6 | 0.6 | -0.5 | -0.5 | -0.5 | -0.5 | -1.0 | |||
| Inflation rate (GDP deflator, in percent) | 2.5 | 3.4 | 2.9 | 2.5 | 2.6 | 2.8 | 2.2 | 2.2 | 2.2 | 2.2 | 2.2 | 2.3 | |||
| Growth of real primary spending (deflated by GDP deflator, in percent) | 2.1 | 1.3 | 0.8 | 8.6 | -4.2 | 2.9 | -0.4 | 2.2 | 1.2 | 0.7 | 2.0 | 1.4 | |||
| Primary deficit | -0.7 | -0.8 | -1.0 | 1.5 | 0.6 | 0.8 | -0.2 | -0.2 | -0.4 | -0.7 | -0.7 | -0.2 | |||
| II. Stress Tests for Public Debt Ratio | Debt-stabilizing primary balance 10/ | ||||||||||||||
| A. Alternative Scenarios | |||||||||||||||
| A1. Key variables are at their historical averages in 2010-2015 7/ | 67.8 | 70.2 | 72.7 | 75.2 | 77.8 | 80.4 | 1.2 | ||||||||
| A2. No policy change (constant primary balance) in 2010-2015 | 67.8 | 69.0 | 70.0 | 71.0 | 72.1 | 73.1 | 0.3 | ||||||||
| B. Bound Tests | |||||||||||||||
| B1. Real interest rate is at baseline plus one standard deviations | 67.8 | 68.1 | 68.4 | 68.3 | 68.1 | 67.9 | 0.5 | ||||||||
| B2. Real GDP growth is at baseline minus one-half standard deviation | 67.8 | 69.3 | 71.2 | 73.2 | 75.6 | 78.5 | 1.3 | ||||||||
| B3. Primary balance is at baseline minus one-half standard deviation | 67.8 | 69.1 | 70.4 | 71.3 | 72.1 | 72.9 | 0.3 | ||||||||
| B4. Combination of B1-B3 using one-quarter standard deviation shocks | 67.8 | 69.0 | 70.2 | 71.1 | 71.8 | 72.5 | 0.8 | ||||||||
| B5. One time 30 percent real depreciation in 2011 9/ | 67.8 | 68.0 | 68.1 | 67.8 | 67.4 | 67.1 | 0.3 | ||||||||
| B6. 10 percent of GDP increase in other debt-creating flows in 2011 | 67.8 | 78.0 | 78.2 | 78.0 | 77.6 | 77.3 | 0.3 | ||||||||
General government gross debt.
Derived as [(r - p(1+g) - g + ae(1+r)]/(1+g+p+gp)) times previous period debt ratio, with r = interest rate; p = growth rate of GDP deflator; g = real GDP growth rate; a = share of foreign-currency denominated debt; and e = nominal exchange rate depreciation (measured by increase in local currency value of U.S. dollar).
The real interest rate contribution is derived from the denominator in footnote 2/ as r - n (1 +g) and the real growth contribution as -g.
The exchange rate contribution is derived from the numerator in footnote 2/ as ae(1+r).
Defined as public sector deficit, plus amortization of medium and long-term public sector debt, plus short-term debt at end of previous period.
Derived as nominal interest expenditure divided by previous period debt stock.
The key variables include real GDP growth; real interest rate; and primary balance in percent of GDP.
The implied change in other key variables under this scenario is discussed in the text.
Real depreciation is defined as nominal depreciation (measured by percentage fall in dollar value of local currency) minus domestic inflation (based on GDP deflator).
Assumes that key variables (real GDP growth, real interest rate, and other identified debt-creating flows) remain at the level of the last projection year.
Malta: Public Sector Debt Sustainability Framework, 2005-2015
(In percent of GDP, unless otherwise indicated)
| Actual | Projections | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |||||
| I. Baseline Projections | Debt-stabilizing primary balance 10/ | ||||||||||||||
| Public sector debt 1/ | 69.5 | 63.2 | 61.3 | 62.6 | 67.7 | 67.8 | 68.0 | 68.1 | 67.9 | 67.5 | 67.2 | 0.3 | |||
| o/w foreign-currency denominated | 0.3 | 0.2 | 0.1 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Public debt plus guarantees | 82.2 | 74.0 | 72.3 | 74.4 | 82.6 | 82.7 | 83.0 | 83.1 | 82.9 | 82.6 | 82.3 | ||||
| Change in public sector debt | -2.8 | -6.4 | -1.8 | 1.2 | 5.1 | 0.1 | 0.2 | 0.1 | -0.2 | -0.4 | -0.4 | ||||
| Identified debt-creating flows (4+7+12) | -2.0 | -2.8 | -5.0 | 1.2 | 3.4 | 0.0 | 0.3 | 0.1 | -0.2 | -0.4 | -0.4 | ||||
| Primary deficit | -0.7 | -0.8 | -1.0 | 1.5 | 0.6 | 0.8 | -0.2 | -0.2 | -0.4 | -0.7 | -0.7 | ||||
| Revenue and grants | 41.6 | 40.9 | 39.9 | 39.7 | 39.6 | 39.3 | 39.3 | 39.3 | 39.3 | 39.0 | 39.0 | ||||
| Primary (noninterest) expenditure | 40.9 | 40.1 | 38.9 | 41.1 | 40.2 | 40.1 | 39.1 | 39.2 | 38.9 | 38.3 | 38.3 | ||||
| Automatic debt dynamics 2/ | -1.2 | -0.9 | -0.8 | 0.2 | 2.8 | -0.7 | 0.4 | 0.3 | 0.2 | 0.3 | 0.3 | ||||
| Contribution from interest rate/growth differential 3/ | -1.3 | -0.9 | -0.8 | 0.2 | 2.8 | -0.7 | 0.4 | 0.3 | 0.2 | 0.3 | 0.3 | ||||
| Of which contribution from real interest rate | 1.9 | 1.2 | 1.5 | 1.8 | 1.6 | 1.2 | 1.7 | 1.6 | 1.5 | 1.6 | 1.6 | ||||
| Of which contribution from real GDP growth | -3.2 | -2.1 | -2.3 | -1.6 | 1.2 | -2.0 | -1.3 | -1.3 | -1.3 | -1.3 | -1.3 | ||||
| Contribution from exchange rate depreciation 4/ | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Other identified debt-creating flows | 0.0 | -1.1 | -3.1 | -0.5 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Privatization receipts (negative) | 0.0 | -1.1 | -3.1 | -0.5 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Recognition of implicit or contingent liabilities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Other (specify, e.g. bank recapitalization) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Residual, including asset changes (2-3) | -0.8 | -3.6 | 3.2 | 0.0 | 1.8 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Public sector debt-to-revenue ratio 1/ | 167.1 | 154.6 | 153.6 | 157.7 | 171.0 | 172.4 | 173.0 | 173.3 | 172.9 | 173.0 | 172.2 | ||||
| Gross financing need 5/ | 14.5 | 13.3 | 12.5 | 15.1 | 15.0 | 15.1 | 14.3 | 14.3 | 13.9 | 13.7 | 13.6 | ||||
| in billions of U.S. dollars | 0.9 | 0.9 | 0.9 | 1.3 | 1.2 | 1.2 | 1.2 | 1.3 | 1.3 | 1.3 | 1.4 | ||||
| Key Macroeconomic and Fiscal Assumptions | Projected Average | ||||||||||||||
| Real GDP growth (in percent) | 4.7 | 3.3 | 3.9 | 2.7 | -1.9 | 3.1 | 2.0 | 2.0 | 2.0 | 2.0 | 2.0 | 2.2 | |||
| Average nominal interest rate on public debt (in percent) 6/ | 5.5 | 5.4 | 5.6 | 5.6 | 5.1 | 4.8 | 4.8 | 4.8 | 4.6 | 4.7 | 4.7 | 4.7 | |||
| Average real interest rate (nominal rate minus change in GDP deflator, in percent) | 2.9 | 2.0 | 2.6 | 3.1 | 2.5 | 2.0 | 2.6 | 2.5 | 2.4 | 2.5 | 2.5 | 2.4 | |||
| Nominal appreciation (increase in US dollar value of local currency, in percent) | -10.9 | 11.0 | 11.8 | -7.5 | 7.2 | -4.6 | 0.6 | -0.5 | -0.5 | -0.5 | -0.5 | -1.0 | |||
| Inflation rate (GDP deflator, in percent) | 2.5 | 3.4 | 2.9 | 2.5 | 2.6 | 2.8 | 2.2 | 2.2 | 2.2 | 2.2 | 2.2 | 2.3 | |||
| Growth of real primary spending (deflated by GDP deflator, in percent) | 2.1 | 1.3 | 0.8 | 8.6 | -4.2 | 2.9 | -0.4 | 2.2 | 1.2 | 0.7 | 2.0 | 1.4 | |||
| Primary deficit | -0.7 | -0.8 | -1.0 | 1.5 | 0.6 | 0.8 | -0.2 | -0.2 | -0.4 | -0.7 | -0.7 | -0.2 | |||
| II. Stress Tests for Public Debt Ratio | Debt-stabilizing primary balance 10/ | ||||||||||||||
| A. Alternative Scenarios | |||||||||||||||
| A1. Key variables are at their historical averages in 2010-2015 7/ | 67.8 | 70.2 | 72.7 | 75.2 | 77.8 | 80.4 | 1.2 | ||||||||
| A2. No policy change (constant primary balance) in 2010-2015 | 67.8 | 69.0 | 70.0 | 71.0 | 72.1 | 73.1 | 0.3 | ||||||||
| B. Bound Tests | |||||||||||||||
| B1. Real interest rate is at baseline plus one standard deviations | 67.8 | 68.1 | 68.4 | 68.3 | 68.1 | 67.9 | 0.5 | ||||||||
| B2. Real GDP growth is at baseline minus one-half standard deviation | 67.8 | 69.3 | 71.2 | 73.2 | 75.6 | 78.5 | 1.3 | ||||||||
| B3. Primary balance is at baseline minus one-half standard deviation | 67.8 | 69.1 | 70.4 | 71.3 | 72.1 | 72.9 | 0.3 | ||||||||
| B4. Combination of B1-B3 using one-quarter standard deviation shocks | 67.8 | 69.0 | 70.2 | 71.1 | 71.8 | 72.5 | 0.8 | ||||||||
| B5. One time 30 percent real depreciation in 2011 9/ | 67.8 | 68.0 | 68.1 | 67.8 | 67.4 | 67.1 | 0.3 | ||||||||
| B6. 10 percent of GDP increase in other debt-creating flows in 2011 | 67.8 | 78.0 | 78.2 | 78.0 | 77.6 | 77.3 | 0.3 | ||||||||
General government gross debt.
Derived as [(r - p(1+g) - g + ae(1+r)]/(1+g+p+gp)) times previous period debt ratio, with r = interest rate; p = growth rate of GDP deflator; g = real GDP growth rate; a = share of foreign-currency denominated debt; and e = nominal exchange rate depreciation (measured by increase in local currency value of U.S. dollar).
The real interest rate contribution is derived from the denominator in footnote 2/ as r - n (1 +g) and the real growth contribution as -g.
The exchange rate contribution is derived from the numerator in footnote 2/ as ae(1+r).
Defined as public sector deficit, plus amortization of medium and long-term public sector debt, plus short-term debt at end of previous period.
Derived as nominal interest expenditure divided by previous period debt stock.
The key variables include real GDP growth; real interest rate; and primary balance in percent of GDP.
The implied change in other key variables under this scenario is discussed in the text.
Real depreciation is defined as nominal depreciation (measured by percentage fall in dollar value of local currency) minus domestic inflation (based on GDP deflator).
Assumes that key variables (real GDP growth, real interest rate, and other identified debt-creating flows) remain at the level of the last projection year.
The 2007/08 Eurostat peer review on the implementation of the European Statistics Code of Practice found that the NSO had reached a remarkable compliance with large parts of the Code despite its small size, but underscored the need to improve adequacy of resources and data quality management.
