Investment abroad up 16.5%, investment into Malta up 35.5% in 2000

Data supplied by the National Statistics Office reveals that direct investment abroad rose by Lm12.6 million, or 16.5 per cent, from Lm76.3 million as at the end of 1999 to a level of Lm88.9 million as at the end of 2000. The rise was mainly induced by an increase in equity capital and reinvested earnings held by residents abroad, from a total of Lm43.4 million as at the end of 1999 to one of Lm56.2 million as at the end of the year under analysis.

On the other hand, direct investment in Malta rose by a notable Lm272.5 million or 35.5 per cent, from a position of Lm766.7 million as at the end of 1999 to one of Lm1039.2 million as at the end of the year under review. This was caused by a significant rise in both equity capital and reinvested earnings as well as other capital, that are due to foreign direct investing entities operating in Malta.

As regards the portfolio investment category, the total amount of assets held by resident entities increased by Lm348.6 million or 44.3 per cent, from a position of Lm787.5 million as at the end of 1999 to a level of Lm1136.2 million as at the end of the year under consideration. In fact, these were mostly held by banks in the form of bonds and notes; with the total rising by Lm361.6 million, from Lm741.3 million as at the end of 1999 to Lm1102.9 million as at the end of 2000.

On the other hand, the total amount of liabilities held by resident entities under this (same) category rose slightly by Lm3 million, or 7.7 per cent, from a position of Lm38.9 million as at the end of 1999 to one of Lm41.9 million as at the end of the year under review.

In a similar fashion, the total amount of assets in the other investment category increased by a notable Lm424.2 million or 17.6 per cent, from a total of Lm2403.8 million as at the end of 1999 to a position of Lm2828.0 million as at the end of 2000; whereas the total liabilities owed by resident entities to non-residents under this category of investment grew by a significant Lm578.9 million or 19.6 per cent, from a total of Lm2960.6 million as at the end of 1999 to a level of Lm3539.5 million as at the end of 2000.

Notwithstanding the above, however, the reserve assets of the country dropped by Lm96.2 million or 13 per cent, from a level of Lm740.3 million as at the end of 1999 to a total of Lm644.1 million as at the end of the year under analysis.

The international investment position is essentially a summary balance sheet containing details on the stock of external assets and liabilities of a country vis-à-vis the world as at the end of a particular period. It is a statement that provides both economic analysts and policy-makers with an insight of the external financial position of a country as well as with another tool to use in order to attain the highest economic well-being for a nation.