New report highlights key role of financial services in Maltese economy

A new report, jointly commissioned by the Institute of Financial Services Practitioners (IFSP), the Malta Institute of Accountants (MIA) and the Malta Institute of Taxation (MIT), highlights the significant contribution of Malta’s services sector to the economy national.

Economist Gordon Cordina of E-Cubed Consultants Ltd has conducted an in-depth survey of the sector. Sharing its initial findings at the IFSP’s annual conference in April, Cordina described its approach as covering a “broader perspective of business policy and behavior, covering a range of service activities with competitiveness issues which include and extend beyond those normally associated with financial services”. .

Entitled “The Contribution of Export-Oriented Foreign Direct Investment in the Services Sector (EFIS) to the Maltese Economy”, the report seeks to quantify the economic impact of export-oriented foreign direct investment firms. export operating in the higher value-added services sector. (EFIS).

This sector, designated specifically for the purpose of the study, includes financial services as well as other service sectors.

Based on 2019 figures, the report highlights that the three main injections into the Maltese economy – namely exports, the creation of productive assets and public expenditure or private consumption – together create substantial demand for activity. trade and economic added value of more than 12 billion euros. . He goes on to point out that companies in the EFIS sector directly generated 19% of the total value added of the Maltese economy.

Furthermore, the report shows that companies in the EFIS sector directly employed almost 10% of the total workforce in the Maltese economy in 2019, or almost 22,200 people.

The report also highlights that the EFIS sector significantly boosts the country’s productivity, with labor productivity at EFIS companies in 2019 estimated at 189% of that of the average level of labor productivity across the economy.

While the growth of the EFIS sector has exceeded that of the overall economy, helping to accelerate overall growth, it has also made direct, indirect and induced contributions in terms of value addition and job creation to the rest of the world. Maltese economy. Out of the total added value of 3,036 million euros generated by the direct and indirect effects of the activity of the EFIS sector, companies outside the EFIS sector had an added value of approximately 194 million euros and 4,700 jobs.

The report also states that companies in the EFIS sector have a relatively low carbon footprint and floor space compared to other sectors in Malta, while offering high salaries.

The findings of this report show that foreign entities engaged in the export of services contribute significantly to Malta’s economic output, employment, government revenue, productivity and economic growth, while having a relatively low impact on the environment compared to other sectors of the economy.

Furthermore, this study helps to assess the full extent of the significant contribution of the EFIS sector to Malta’s economy – and its importance as part of the country’s economic future.

The report and its main findings were presented to Robert Abela and Finance Minister Clyde Caruana during a meeting in Castilla and to opposition leader Bernard Grech, accompanied by opposition spokesman Jerome Caruana Cilia for finance, and Ivan Bartolo, opposition spokesman for the economy.

More information about IFSP, MIA and MIT can be found at www.ifsp.org.mt, www.miamalta.org and www.maintax.org, respectively.