Service activities push Malta’s GDP upwards in second quarter for 2024

Malta’s GDP continued to register robust growth in the second quarter of 2024, rising by 7.6 per cent to reach €5.5 billion.

The lastest National Statistic release shows that in volume terms, GDP rose by 4.4 per cent, with domestic demand having a positive contribution of 2.1 percentage points (pp) and external demand registering a positive contribution of 2.3 pp.

The economy saw growth by most measures, as outlined in more depth below, but the rate of growth is markedly more constrained than it was over the last years.

For example, the 7.6 per cent rate of growth is the lowest in almost two years, since the third quarter of 2022.

Additionally, companies may be feeling the pinch – as noted by the Malta Employers’ Association new director over the weekend – with gross operating surplus only contributing 1.7 percentage points to the nominal GDP growth. This represented a significant decrease over the rates seen in the previous four quarters (2023Q2: 9.4 pp; 2023Q3: 7.7 pp; 2023Q4: 8.7 pp; 2024Q1: 5.4 pp).

Similarly, when measuring gross value added (GVA), its contribution to nominal GDP of 4.9 pp seen in the second quarter of 2024 – while strong – is less than half the rates over the last four quarters (2023Q2: 13.8 pp; 2023Q3: 11.6 pp; 2023Q4: 11.1 pp; 2024Q1: 9.6 pp).

The slowing growth is largely a result of a similarly significant slowdown in services, which saw their contribution to nominal GDP decline from 12.2 pp in the second quarter of 2023 to 4.7 pp in the same period of 2024.

Final consumption expenditure by the private and government sectors also registered a more muted increase of 1.6 pp when compared to the 4.5 pp seen a year ago.

However, this must be seen in the context of a declining rate of inflation, with the large price increases seen over the last two years – leading to a corresponding increase in nominal GDP – moderating to more manageable levels in 2024.