MaltaMedia.com

The IIP statement is a summary balance sheet that shows the stock of external assets and liabilities of Malta vis-à-vis the rest of the world economy as at the end of a particular period. For the first time, the IIP is being published on a bi-annual basis.

The IIP reflects the net foreign assets (NFA), which is the balance of foreign assets less foreign liabilities. When compared to the position as at the end of December 2008, the IIP at the end of June 2009 registered an improvement of €419.8 million. A drop in foreign assets of €1,733.1 million was compensated by a larger decrease in foreign liabilities amounting to €2,153.0 million.

The predominant decrease in foreign assets resulted mainly from net re-payment of loans amounting to €2,218.9 million. Revaluation changes, comprising exchange rate and market changes, also played a significant role. This was particularly evident in foreign direct investment (FDI) abroad. In fact, while the increase in balance of payments transactions in FDI abroad amounted to €19.0 million, the above-mentioned revaluations accounted for €226.5 million.

During the first six months this year, the decrease in foreign liabilities occurred mainly in the ‘Other Investment’ account. Out of a decrease of €2,445.4 million in this account, €2,090.4 million were due to balance of payments transactions.

Loan liabilities registered a drop of €744.4 million, of which €540.4 million were due to actual repayments. The stock position of currency, deposits and other liabilities as at the end of June 2009 decreased by €1,507.1 million when compared to the position as at the end of December 2008. These were essentially brought about by transactions in balance of payments totalling €1,566.1 million.

Official reserve assets at the end of June 2009 increased by €93.5 million over the position at the end of December 2008 with transactions accounting for €67.1 million and the rest due to revaluations.