Abstract
This staff report on Malta’s Article IV Consultation highlights economic development and policies. Risks from the large international bank sector appear contained given limited balance-sheet exposure to the Maltese economy, though continued vigilance is warranted. Regulatory changes to increase loan loss provisions, and the funding of the deposit compensation scheme would help contain risks in the domestic banking sector. The main challenges for fiscal policy are to reverse the deterioration of public finances, and to strengthen the governance framework. Additional measures are needed to ensure that the fiscal deficit falls below 3 percent of GDP in 2013 and that public debt remains on a sustainable path.
Fund Relations
(As of March 31, 2013)
Membership Status
Joined: September 11, 1968; Article VIII
General Resources Account
| SDR Million | Percent Quota | |
|---|---|---|
| Quota | 102.00 | 100.00 |
| Fund holdings of currency | 68.81 | 67.46 |
| Reserve Tranche Position | 33.21 | 32.56 |
| Lending to the Fund Borrowing Agreement | 15.00 |
| SDR Million | Percent Quota | |
|---|---|---|
| Quota | 102.00 | 100.00 |
| Fund holdings of currency | 68.81 | 67.46 |
| Reserve Tranche Position | 33.21 | 32.56 |
| Lending to the Fund Borrowing Agreement | 15.00 |
SDR Department
| SDR Million | Percent Allocation | |
|---|---|---|
| Net cumulative allocation | 95.40 | 100.00 |
| Holdings | 89.45 | 93.76 |
| SDR Million | Percent Allocation | |
|---|---|---|
| Net cumulative allocation | 95.40 | 100.00 |
| Holdings | 89.45 | 93.76 |
Outstanding Purchases and Loans
None
Financial Arrangements
None
Projected Obligations to Fund 1/
(SDR million; based on existing use of resources and present holdings of SDRs)
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section..
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2013 | 2014 | 2015 | 2016 | 2017 | |
| Principal | |||||
| Charges/Interest | 0.00 | 0.01 | 0.01 | 0.01 | 0.01 |
| Total | 0.00 | 0.01 | 0.01 | 0.01 | 0.01 |
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section..
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2013 | 2014 | 2015 | 2016 | 2017 | |
| Principal | |||||
| Charges/Interest | 0.00 | 0.01 | 0.01 | 0.01 | 0.01 |
| Total | 0.00 | 0.01 | 0.01 | 0.01 | 0.01 |
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section..
Exchange Rate Arrangement
Member of the euro area since January 1, 2008. 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 which have been notified to the IMF pursuant to Executive Board Decision No. 144-(52/51).
Article IV Consultation
Malta is on the standard 12-month consultation cycle. The previous consultation discussions took place during January 12-23, 2012. On March 21, 2012, the Executive Board of the IMF concluded the Article IV consultation with Malta on a lapse-of-time basis. The staff report (Country Report No.12/105) was published.
Technical Assistance
Technical Assistance
| Date | Department | Subject |
|---|---|---|
| May 2013 | STA | Balance of Payments |
| April 2009 | STA | SDDS subscription finalization |
| November 2006 | STA | Producer price index/SDDS preparations |
| April and December 2007 | (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 |
Technical Assistance
| Date | Department | Subject |
|---|---|---|
| May 2013 | STA | Balance of Payments |
| April 2009 | STA | SDDS subscription finalization |
| November 2006 | STA | Producer price index/SDDS preparations |
| April and December 2007 | (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 |
Resident Representative
None
Statistical Information
(As of May 28, 2013)
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 standards1. 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. However, national accounts data have remained subject to substantial revisions, often affecting several years. The reasons for revisions generally include (i) large statistical discrepancies (captured under stock building), particularly on the first release, (ii) changes in data classification for large shipments of oil exports and imports, and (iii) revisions of deflators. Furthermore, supply-side GDP estimates by type of economic activity are only available at current prices. The producer price index for manufacturing has been published, but that for services sector is still under discussion. 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. It is recommended that the Maltese authorities start to compile the financial balance sheets and transactions by sectors, household debt, and saving rate.
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://fsi.imf.org).
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. The balance of payments data are usually subject to large revisions. Summary trade statistics are released monthly with a lag of about 40 days. The CBM also publishes the external debt templates in line with requirements of the SDDS, including both gross and net external debt.
Malta: Table of Common Indicators Required for Surveillance
(As of May 28, 2013)
Exchange rate arrangement is free floating.
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).
Malta: Table of Common Indicators Required for Surveillance
(As of May 28, 2013)
| Date of latest observation | Date received | Frequency of Data 8/ | Frequency of Reporting 8/ | Frequency of Publication 8/ | Memo Items: | ||
|---|---|---|---|---|---|---|---|
| Data Quality – Methodological soundness 9/ | Data Quality – Accuracy and reliability 9/ | ||||||
| Exchange Rates 1/ | Current | Current | D | D | D | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities 2/ | Dec 2012 | Apr 2013 | Q | Q | Q | ||
| Central Bank Balance Sheet | Dec 2012 | Apr 2013 | Q | Q | Q | … | … |
| Consolidated Balance Sheet of the Banking System | Dec 2012 | Apr 2013 | Q | Q | Q | … | … |
| Interest Rates 3/ | Apr 2013 | Apr 2013 | M | M | M | ||
| Consumer Price Index | Apr 2013 | Apr 2013 | M | M | M | O, LO, O, O | O, O, LO, LO, O |
| Revenue, Expenditure, Balance and Composition of Financing 4/ – General Government 5/ | 2013:Q1 | Apr 2013 | Q | Q | Q | O, LO, O, LO | O, O, O, LO, O |
| Revenue, Expenditure, Balance and Composition of Financing 4/– Central Government | 2013:Q1 | Apr 2013 | Q | Q | Q | ||
| Stocks of General Government and General Government Guaranteed Debt 6/ | 2013:Q1 | Apr 2013 | Q | Q | Q | ||
| External Current Account Balance | 2012:Q4 | Apr 2013 | Q | Q | Q | O, LO, O, O | LO, O, O, O, LNO |
| Exports and Imports of Goods and Services | 2012:Q4 | Apr 2013 | Q | Q | Q | ||
| GDP/GNP | 2012:Q4 | Apr 2013 | Q | Q | Q | O, LNO, O, LO | LO, O, LO, LO, LO |
| Gross External Debt | 2012:Q1 | Apr 2013 | Q | Q | Q | ||
| International Investment Position 7/ | 2012:Q4 | Apr 2013 | A | A | A | ||
Exchange rate arrangement is free floating.
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).
Malta: Table of Common Indicators Required for Surveillance
(As of May 28, 2013)
| Date of latest observation | Date received | Frequency of Data 8/ | Frequency of Reporting 8/ | Frequency of Publication 8/ | Memo Items: | ||
|---|---|---|---|---|---|---|---|
| Data Quality – Methodological soundness 9/ | Data Quality – Accuracy and reliability 9/ | ||||||
| Exchange Rates 1/ | Current | Current | D | D | D | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities 2/ | Dec 2012 | Apr 2013 | Q | Q | Q | ||
| Central Bank Balance Sheet | Dec 2012 | Apr 2013 | Q | Q | Q | … | … |
| Consolidated Balance Sheet of the Banking System | Dec 2012 | Apr 2013 | Q | Q | Q | … | … |
| Interest Rates 3/ | Apr 2013 | Apr 2013 | M | M | M | ||
| Consumer Price Index | Apr 2013 | Apr 2013 | M | M | M | O, LO, O, O | O, O, LO, LO, O |
| Revenue, Expenditure, Balance and Composition of Financing 4/ – General Government 5/ | 2013:Q1 | Apr 2013 | Q | Q | Q | O, LO, O, LO | O, O, O, LO, O |
| Revenue, Expenditure, Balance and Composition of Financing 4/– Central Government | 2013:Q1 | Apr 2013 | Q | Q | Q | ||
| Stocks of General Government and General Government Guaranteed Debt 6/ | 2013:Q1 | Apr 2013 | Q | Q | Q | ||
| External Current Account Balance | 2012:Q4 | Apr 2013 | Q | Q | Q | O, LO, O, O | LO, O, O, O, LNO |
| Exports and Imports of Goods and Services | 2012:Q4 | Apr 2013 | Q | Q | Q | ||
| GDP/GNP | 2012:Q4 | Apr 2013 | Q | Q | Q | O, LNO, O, LO | LO, O, LO, LO, LO |
| Gross External Debt | 2012:Q1 | Apr 2013 | Q | Q | Q | ||
| International Investment Position 7/ | 2012:Q4 | Apr 2013 | A | A | A | ||
Exchange rate arrangement is free floating.
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).
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.