The Gross Domestic Product shrank by 3.3 percent in real terms in the first quarter of this year, following another decline (0.3 %) in the last quarter of 2008.

The NSO figures, which confirm the Maltese economy is in recession, show that in the first quarter of 2009, GDP amounted to €1,315.2 million, a decline of 1.0 percent compared to the corresponding period last year. In real terms, GDP contracted by 3.3 percent.

The National Statistics Office said that lower tourist arrivals along with a downturn in global demand due to the international financial crisis were the cause of the decline in Malta’s economic activity during the period under review.

The Production Approach

The NSO said drops in value added were registered in electricity, gas and water supply; hotels and restaurants; fishing and the overall manufacturing sector. Drops were also registered in wholesale and retail trade; financial intermediation; transport, storage and communication; construction; and public administration. Growth in value added was registered in remote gaming activities; health; education; agriculture; real estate, renting and business activities.

The Expenditure Approach

The NSO said that at constant prices GDP declined by 3.3 per cent. Total final consumption expenditure in real terms declined by 0.8 per cent. Gross fixed capital formation at constant prices declined. Real exports and real imports also experienced drops.

The NSO said that a decline in GDP at current prices, amounting to €13.7 million, was estimated to have been caused by a €25.8 million rise in compensation of employees, a €45.3 million fall in gross operating surplus of enterprises, and a €5.7 million rise in net taxation on production and imports.