General Notes and Abbreviations List

Malta adopted the euro on 1 January 2008. For ease of comparison, all data relating to earlier periods presented in this part of the website are converted into euro at the fixed exchange rate of Lm0.4293=EUR1. The reasons for this approach were explained in a note which is currently shown in the introductory part to the Statistics section of the Central Bank of Malta’s website.

MONETARY, INVESTMENT FUNDS, FINANCIAL MARKETS

Balance sheets of the MFI sector

The balance sheets of the MFI sector, which include the Balance sheet of the Central Bank of Malta and those of the other monetary financial institutions, are based on a detailed description of instrument categories as stipulated in Regulation ECB/2001/13 of 22 November 2001 (as amended). Consequently, the data shown in the Central Bank of Malta’s balance sheet may differ from those shown in the statement of assets and liabilities shown in other sections of the website, which are compiled according to accounting principles. Important changes to data on currency issued and reserve assets following adoption of the euro are explained below in the ‘measures of money’ and in the ‘external statistics’ section, respectively.

General monetary statistical standards

Since October 2003, the compilation of monetary statistics by the Central Bank of Malta has been consistent with internationally agreed statistical concepts and methodologies as set out in the IMF’s Monetary and Financial Statistics Manual (2000), the European System of Accounts (ESA 1995), and Regulation ECB/2001/13 (as amended) concerning the consolidated balance sheet of the monetary financial institutions (MFI) sector. Prior to October 2003, the compilation of monetary statistics was broadly in line with the IMF’s A Guide to Money and Banking Statistics in International Financial Statistics of December 1984.

Determination of ‘residence’

Monetary data are based on the classification of transactions and positions by the residence of the transactor or holder. A transactor is an economic entity that is capable in its own right of owning assets, incurring liabilities and engaging in economic activities with other entities. The internationally agreed residence criterion for the purposes of statistical compilation is based on the transactor’s ‘centre of economic interest’. The term ‘centre of economic interest’ usually indicates that there exists some location within the economic territory on or from which a unit engages, and intends to continue to engage, in economic activities and transactions on a significant scale, either indefinitely or over a finite but long period of time (a year or more). Transactors with their ‘centre of economic interest’ outside the territory where the statistics are compiled are considered to be non-residents. Diplomatic bodies, embassies, consulates and other entities of foreign governments are considered to be residents of the country they represent.

In national monetary statistics, the key distinction up to December 2007 was between residents and non-residents of Malta. Although that distinction remains relevant for national statistical purposes, the key distinction now, for purposes of Malta’s contribution to euro area monetary aggregates, is between residence (in Malta or elsewhere) in the euro area and residence outside the euro area. That is why, wherever possible, a distinction is made in the relevant tables among non-residents of Malta between residents of other euro area countries and non-residents of the euro area.

Sector classification

In accordance with ESA 95, the main sectors of the Maltese (and euro area) economy, for statistical reporting purposes, are currently subdivided by their primary activity into:

Entities that are considered to be non-residents are classified in the ‘external sector’ or the ‘rest of the world’. As noted above, in many statistical tables, and starting with data for 2008, they are split into other euro area residents and non-residents of the euro area (and may be further sub-classified by sector according to their primary activity).

(a) Monetary financial institutions (MFIs) consist of:

ii. Private non-financial corporations, i.e. companies that are controlled by non-government units, whether resident or non-resident.

(f) Households and non-profit institutions serving households (NPISH):

This sector comprises individuals or groups of individuals that are consumers and producers of goods and non-financial services exclusively intended for their own final consumption. It includes also non-profit institutions serving households principally engaged in the production of non-market goods and services intended for particular sections of households (churches, clubs, societies, trade unions, etc.) and market-producing cooperatives, partnerships and sole proprietorships that are not recognised as independent legal Entities. Thus many small businesses are included in the household sector.


Classification of economic activities

The classification of economic activities follows the standards of Regulation (EEC) No 3037/90 entitled “Nomenclature générale des activités économiques dans les Communautés européennes” (General industrial classification of economic activities within the European Communities), known by the acronym NACE Rev.1.


Measures of money

Until the end of 2007, the Central Bank of Malta compiled data on the following monetary aggregates: the monetary base (M0), narrow money (M1), intermediate money (M2) and broad money (M3). The monetary base (M0) consisted of currency in issue and OMFI deposits with the Bank. Narrow money (M1) included the most liquid components of M3, namely currency in circulation, demand deposits and savings deposits withdrawable on demand. Intermediate money (M2) comprised M1, residents’ savings deposits redeemable at notice and time deposits with an agreed maturity of up to and including two years. Broad money (M3) comprised M2 and the OMFIs’ repurchase agreements with the non-bank sector and their debt securities with an agreed maturity of up to and including two years held by the non-bank sector.

Since January 2008, the Central Bank of Malta has been transmitting data collected from MFIs in Malta to the ECB as a contribution to the euro area monetary aggregates compiled by the ECB. The euro area aggregates are defined in a similar way to the Maltese monetary aggregates formerly compiled by the Bank. However it is not possible to calculate the money holdings of Maltese residents within the euro area totals. This is because statistics on currency issued for Malta now show a notional issue of euro banknotes attributed to the Central Bank of Malta according to what is called the banknote allocation key, based on the Bank’s share in the capital of the ECB. This may be quite different from the amount of euro banknotes in the hands of Maltese residents because euro area aggregates include cross-border holdings of monetary instruments within the euro area (in this case, holdings by Maltese residents of deposits and other monetary instruments issued by MFIs throughout the euro area, the amount of which is not known).

In the euro area, by agreement between the members, the share of each central bank in the Eurosystem (the Eurosystem comprises the ECB and the NCBs of the other EU Member States in the euro area) in the total issue of banknotes in the area is deemed to be that central bank’s share in the capital of the ECB adjusted for a notional 8% of the total issue, which is attributed to the ECB itself. This is called the banknote allocation key. In the euro area, the Central Bank of Malta may in practice issue more or less than this, in response to demand; the excess or shortfall will appear elsewhere in the Bank’s balance sheet, either as an intra-Eurosystem liability or asset, or in ‘External liabilities/other euro area residents’ or in ‘External assets/other external claims/on other euro area residents’. The main point is that the entry in the column ‘Currency issued’ in the Financial Statements of the Bank will be a notional amount conforming to the banknote allocation key.

The Table entitled ‘The contribution of resident MFIs to the euro area monetary aggregates‘ shows the contribution of Maltese MFIs to the euro area totals. This comprises the notional issue of euro currency attributed to the Bank according to the banknote allocation key, plus the issue of coins (where the Central Bank of Malta acts as agent of the Treasury), and, for 2008 only, remaining amounts of Maltese Lira currency outstanding less holdings of euro banknotes and coins and, temporarily, of Maltese Lira currency notes reported by MFIs in Malta; deposits held by Maltese residents and by residents of other euro area countries with MFIs in Malta excluding any holdings belonging to central governments (since central government holdings of deposits are excluded from the ECB’s monetary aggregates) and any interbank deposits; and any marketable instruments of the kind included in euro area M3 issued by MFIs in Malta less holdings by Maltese MFIs of such instruments issued by MFIs resident anywhere in the euro area. Because Maltese MFIs may hold more of these instruments than they issue, this part of the Maltese contribution to euro area M3 may be negative.

In the Table entitled ‘The contribution of resident MFIs to selected counterparts to euro area M3’, the ‘credit counterpart’ to euro area M3 contributed by Maltese MFIs comprises all Maltese MFI lending (including through the acquisition of securities in any form) to Maltese and all other euro area residents (other than MFIs). The so-called ‘external counterpart’ will be limited to their net claims on non-residents of the euro area (this is Maltese MFIs’ - including the Central Bank’s - claims on non-residents of the euro area, minus their liabilities outside the euro area, in all forms and in foreign currency as well as in euro). ‘Other counterparts (net)’ comprise other items in the balance sheets of Maltese MFIs (including the Central Bank of Malta).


Compilation and valuation principles

Monetary statistics are based on the monthly financial statements provided by the Central Bank of Malta and the local OMFIs. The OMFIs must submit data to the Central Bank of Malta not later than twelve calendar days following the end of the reporting period. Bank branches and subsidiaries operating in Malta but whose head offices/parent companies are located abroad are OMFIs and are obliged to submit the same data. The reporting institutions compile monthly financial information in line with Regulation ECB/2001/13 (as amended). In addition, in certain instances, the OMFIs are required to submit returns in accordance with specific statistical requirements as instructed by the Central Bank of Malta.

MFIs report stock positions, which are outstanding balances as at the end of the reference period, and for certain items transactions during the period. They show separately positions and transactions with residents of Malta, with residents of other euro area countries, and with non-residents of the euro area. Assets and liabilities are generally reported at market or fair value and on an accruals basis; deposits and loans are reported at nominal value. Thus, the effects of transactions and other events are recognised when they occur rather than when cash is received or paid. Transactions are recorded at the time of change in ownership of a financial asset. Within this context, change in ownership is accomplished when all rights, obligations and risks are discharged by one party and assumed by another. Instruments are reported in accordance with their maturity at issue, that is, by original maturity. Original maturity refers to the fixed period of life of a financial instrument before which it either cannot be redeemed, or can be redeemed only with some significant penalty.

All financial assets and liabilities are reported on a gross basis. Loans - which include overdrafts, bills discounted and any other facility whereby funds are lent - are reported gross of all related provisions, both general and specific. Financial assets and liabilities that have demonstrable value - as well as non-financial assets - are considered as on-balance sheet items. Other financial instruments, whose value is conditional on the occurrence of uncertain future events, such as contingent instruments, are not recorded on the statistical balance sheet.


Release of monetary statistics

Monetary aggregates for the euro area are published by the ECB on the 19th working day of the month following the reference month. The ECB publishes certain more detailed monetary data on a quarterly basis. The Maltese contribution to the monthly aggregates is then posted on the Central Bank of Malta’s website. When first published, monetary statistics are considered provisional since the Bank may need to revise the data referring to the periods prior to the current reference period arising from, for example, reclassifications or improved reporting procedures. The ECB accepts revisions to the previous month’s data with each monthly submission; revisions to earlier periods are normally submitted with the next provision of quarterly data. Malta’s contributions to the euro area aggregates published by the Central Bank of Malta must be consistent with the latest euro area aggregates published by the ECB. Subsequently, such provisional monetary data, together with related analytical information, are released by the Central Bank of Malta to the press through the Bank’s monthly ‘Release on the Maltese contribution to the euro area monetary aggregates and to selected counterparts to euro area M3’ and in more detail in the Central Bank of Malta’s Quarterly Review and Annual Report. The statistics released in the Quarterly Review and Annual Report are generally considered to be final. Major revisions to the data are also highlighted by means of footnotes in these publications. When major revisions to the compilation methodology are carried out, the Bank releases advance notices in its official publications.


Financial market interest rates

Up to the December 2007, the Table entitled ‘Financial Markets’ showed the statutory interest rates determined by the Central Bank of Malta and other indicative benchmark money market rates on instruments denominated in Maltese Liri as end-of-period rates and as a percentage per annum. The repurchase agreement/term deposit rates were the rates actually dealt in at the end of the month or the rates offered by the Central Bank of Malta. The interbank market offered rates were the rates prevailing in the last dealings between banks in the official interbank market during the last month of the period being reported on. When no deals were transacted, the Central Bank of Malta fixing rate average was shown. Such past data are now being shown in the Table entitled ‘Financial Markets – Historic Rates’.

After 31 December 2007, the Central Bank of Malta ceased to declare interest rates for its operations, and at the beginning of 2008 the Maltese money market became part of the integrated euro area-wide interbank market. Thus, from 2008 (and with some earlier data for convenience), the financial market interest rates shown are the key interest rates determined by the ECB for central bank operations throughout the euro area, and overnight (EONIA) and fixed-term (EURIBOR) rates on wholesale business in euro-denominated deposits as reported daily by a panel of active institutions in the euro interbank market. The Table also shows the weighted average rates paid on resident current, savings and time deposits by MFIs in Malta (in Maltese Liri to end-2007, in euro since), calculated by multiplying each amount by the different rates on each type of deposit and dividing by the total amount of each type of deposit. The weighted average rate on time deposits is calculated on all time deposits. The weighted average lending rate is calculated by multiplying the amount of each loan extended to residents by the interest rate applied thereto and dividing by the total amount.

Yields shown on Treasury bills and government securities up to end-2007 are rates on instruments denominated in Maltese Liri. All outstanding Treasury bills and government securities denominated in Maltese Liri were redenominated in euro at the beginning of 2008. The primary market rates on Treasury bills are the weighted averages of the rates attached to the bills that are taken up by bidders at the weekly auction. Treasury bills are classified by original maturity. A “-” sign means that no transactions occurred during the reference period. Until end-2007, the secondary market yields represented selling rates quoted by the Central Bank of Malta at the end of the reference period for each respective tenor.

Interest rates on Malta Government long-term debt securities represent average International Securities Market Association (ISMA) redemption yields on applicable stocks with the periods specified referring to the remaining term to maturity. ISMA yields are quoted on the basis of an annual compounding period, irrespective of how many coupon periods per annum the stock has. The MSE share index is based on the last closing trade prices of the shares of all eligible companies and weighted by their current market capitalisation. The index has a base of 1,000 on 27 December 1995.


Investment funds

The investment funds sector consists of collective investment schemes licensed by the MFSA; the data in the Table entitled ‘Aggregated statement of assets and liabilities - investment funds’ exclude professional investor funds and money market funds. The balance sheet is aggregated, not consolidated, and therefore includes, among the assets and liabilities, holdings by investment funds of shares/units issued by other investment funds.

Link to Monetary, Investment Funds and Financial Market Statistics

GOVERNMENT FINANCE STATISTICS

Tables in this section show the general government fiscal position compiled on the basis of ESA 95 methodology. The data are consolidated between the sectors of government. The sources for such data are the NSO and Eurostat. Government expenditure classified by function is based on the OECD’s Classification of the Functions of Government (COFOG), which is a classification of the functions, or socio-economic objectives, that the general government sector aims to achieve through various outlays.

The Table on the general government deficit-debt adjustment (DDA) shows how the general government deficit is financed and considers the relationship between the deficit and Maastricht debt. The DDA thus reconciles the deficit over a given period with the change in Maastricht debt between the beginning and the end of that period. The difference is mainly explained by government transactions in financial assets, such as through privatization receipts or the utilization of its deposit accounts, and by valuation effects on debt.

The general government debt is defined as the total gross debt at nominal value outstanding at the end of a period and consolidated between and within the various sections of the government. Also shown are data on debt guaranteed by the government, which mainly relate to non-financial public sector corporations. Government guaranteed debt excludes guarantees on the MIGA and IBRD positions and government guarantees on foreign loans taken by the Central Bank of Malta on behalf of government, which loans already feature in the calculation of government external debt. Government guaranteed debt includes guarantees issued by the extra-budgetary units and excludes guarantees granted to the latter as they already feature in the general government debt. The methodology underlying the compilation of the data on the external loans of general government is generally consistent with the standards of the World Bank’s Debtor Reporting System (DRS). The data refer to external loans with an original maturity of one year and over. Debt is recognised when disbursement of funds is effected. Data on debt denominated in other currencies are converted into euro using end-of-period exchange rates.

Link to Government Finance Statistics

EXTERNAL STATISTICS

The concepts and definitions used in the compilation of balance of payments and international investment position (IIP) statistics are generally in line with the IMF Balance of Payments Manual (BPM05) and in accordance with Guideline ECB/2004/15 (as amended by Guideline ECB/2007/3). Credit entries are recorded for e.g. exports, income receivable, and financial transactions reflecting reductions in the economy’s foreign assets or increases in its foreign liabilities. Conversely, debit entries are recorded for e.g. imports, income payable, and financial transactions reflecting increases in assets or decreases in liabilities. The concepts of economic territory, residence, valuation and time of recording are broadly identical to those used in the compilation of monetary statistics. The IIP statistics are based on positions vis-à-vis nonresidents of Malta and are, in most cases, valued at current market prices. Up to the end of 2007, official reserve assets comprised gold, claims on the IMF, and liquid claims held by the Central Bank of Malta on entities resident outside Malta, mainly central banks, other banks, and governments, in line with the IMF’s Balance of Payments Manual (BPM5). From 2008, official reserve assets correspond to the part of the reserve assets of the Eurosystem held by the Central Bank of Malta, and are confined to gold, claims on the IMF, and liquid claims held by the Central Bank of Malta on entities resident outside the euro area and denominated in currencies other than the euro. All euro-denominated assets, and assets denominated in any currency representing claims on entities resident in the euro area held by the Bank and classified as official reserve assets up to the end of 2007, were on Malta’s entry into the euro area reclassified as portfolio investment or other investment, depending on the nature of the instrument.

Latest trade data are based on the respective NSO press release. Historical data are updated by the Central Bank of Malta on a monthly basis, going back thirteen months, while every calendar quarter data are revised going back three years.

Link to External Statistics

REAL ECONOMY INDICATORS (SELECTED)

National accounts and other general economic statistics are mostly produced by the NSO in accordance with ESA 95 standards except for the labour market indicators based on the ETC’s administrative records, and the RPI. Labour market statistics are also compiled on the basis of the NSO’s Labour Force Survey (LFS). The LFS is based on a random sample of private households using concepts and definitions outlined by Eurostat according to methodologies established by the International Labour Organisation (ILO). From March 2004, data are based on a weekly survey carried out throughout the reference quarter; from June 2005 the data are weighted using a new procedure and are thus not strictly comparable with earlier figures. The labour market data based on the administrative records of the ETC represent a measure of the gainfully occupied population using information obtained from the engagement and termination forms filed with the ETC itself. ETC data on unemployment are based on the number of persons registering for work under Part 1 and Part 2 of the unemployment register.

The RPI covers all monetary consumption expenditure incurred by Maltese residents weighted according to the spending pattern derived from the Household Budgetary Survey 2000/1. The HICP by contrast covers all household final consumption expenditure irrespective of nationality or residence status.

Consequently, the HICP uses weights that cover not only resident private and institutional household expenditure but also expenditure by tourists in Malta. The differences in these weighting schemes account significantly for the monthly disparities between the RPI and the HICP. The sources of the data used in the compilation of the Central Bank of Malta’s property prices index are the advertisements for the sale of properties in all localities in Malta and Gozo published in a local Sunday newspaper. Data for a particular quarter are derived from the newspapers published on the first Sunday of each month within the quarter. The property types include flats and maisonettes, both in shell and in finished form, together with terraced houses, townhouses, houses of character and villas. Indices for each property type are derived on the basis of median prices weighted by the number of observations in each property category. The overall index is a Fischer chained index, calculated as the square root of the product of the chained Laspeyres and the chained Paasche indices. Annual data are derived as an average of the quarterly indices. Prices of commercial properties are excluded from the index.

Link to Real Economy Indicators

ABBREVIATIONS LIST