Oil re-exportation is “distorting” Malta’s trade figures which have seen a drop in both exports and imports in most other sectors.
One month does not make a summer or a winter
Figures released by the National Statistics Office yesterday showed imports increased by €40 million and exports by €170 million.
But both imports and exports grew almost exclusively from the re-export of “mineral fuels, lubricants and other related materials”. The figures compared February with the same month last year.
This year, imports of mineral fuels, lubricants and related materials amounted to €245 million, a large increase from €140 million last year.
This made up for a large drop in imports of machinery and transport equipment from €140 million to €84 million.
Imports and exports of food, chemicals and semi-manufactured goods all went down.
Factories also imported €27.7 million less industrial supplies (raw materials), indicating a slowdown in production.
The only sectors to show export growth were “crude materials”, up to €1.9 from €1.4 million and “miscellaneous manufactured articles”, which was up €34 from €32.4 million.
Although the figures seem to suggest a slowdown of real imports and exports, economists have urged caution.
Economist and former minister Lino Spiteri said “one month does not make a summer or a winter”.
“It’s just an indicator. One would have to look at three months to establish trends.”
However, he said, it was a fact that oil imports and exports were distorting the trade figures.
“It would be useful if the NSO could identify them separately. Once you remove the oil factor you get the real exports and imports of the economy.”
Mr Spiteri added that oil imports and exports contributed a “small profit” to the people dealing in them but no “value added”.
“It’s still an increase in profits but what you have to look at are the sustainable imports and exports.”
Economist Gordon Cordina agreed that not much could be concluded from one month’s data since this was subject fluctuations and possible revisions.
He said it would be good for NSO to provide data on the level of employment in firms exporting oil so the economic significance of this activity could be better understood.
The same sentiments were echoed by another economist, Lino Briguglio, who pointed out that the value added of the exports actually produced in Malta probably accounted for just 30 per cent of the final product since a large proportion of exports were related to imported industrial supplies.