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Malta Economy
 
 
 

General

Until 1800, Malta had very few industries except the cotton, tobacco, and shipyards industry. The dockyard was later used by the British for military purposes. At times of war, Malta's economy prospered due to its strategic location. This could be seen during the Crimean War of 1854. This benefited those who had a military role, as well as the craftsmen.

In 1869, the opening of the Suez Canal benefited Malta's economy greatly as there was a massive increase in the shipping which entered in the port. Entrepôt trade saw many ships stopping at Malta's docks for refuelling, which brought great benefits to the population.

By the end of the 19th century, the economy began declining and by the 1940s, Malta's economy was in serious crisis. This was partially due to the longer range of newer merchant ships which required less frequent refuelling stops.

Presently, Malta's major resources are limestone, a favourable geographic location, and a productive labour force. Malta produces only about 20% of its food needs, has limited freshwater supplies, and has no domestic energy sources. The economy is dependent on foreign trade (serving as a freight trans-shipment point), manufacturing (especially electronics and textiles), and tourism. Tourism infrastructure has increased dramatically over the years and a number of good-quality hotels are present on the island. An increasing number of Maltese now travel abroad on holiday. Although they are still a net importer of tourism, the ratio of inbound tourists to outbound tourists is decreasing. Film production is a growing contributor to the Maltese economy, with several big-budget foreign films shooting in Malta each year. The country has increased the exports of many other types of services such as banking and finance.

Another important resource for the Republic is Human Resources. The government is investing heavily in the country's provision of education. As all education is free, Malta is currently producing a pool of qualified persons which heavily contribute to the country's growing economy.

Malta has recently privatised some state-controlled firms and liberalised markets in order to prepare for membership in the European Union, which it joined on May 1, 2004. Malta and Tunisia are currently discussing the commercial exploitation of the continental shelf between their countries, particularly for petroleum exploration.

The Maltese government entered ERM II on 4th May 2005, and will adopt the euro as the country's currency on 1 January 2008. Maltese euro coins will feature the Maltese cross.

Recently in Malta, investments have been increasing and the strength of the Maltese Economy is increasing. A fine example is SmartCity, which, when fully completed, will provide well over 5600 new jobs.

Although Malta is now a member of the European Union, it is not a member of the Schengen Treaty yet. It is currently adopting Schengen regulations with the goal of joining in March 2008.

In 2001 GNP per capita (purchasing power parity) was $15,000. That same year, GDP real growth was estimated at 4%. Agriculture contributed 2.8% to GDP, industry amounted to 25.5%, while services were 71.7%.

Overview

Economy - overview
Major resources are limestone, a favourable geographic location and a productive labour force. Malta produces only about 20% of its food needs, has limited fresh water supplies and has few domestic energy sources. The economy is dependent on foreign trade, manufacturing (especially electronics and pharmaceuticals), and tourism. Continued sluggishness in the European economy is holding back exports, tourism and overall growth.
GDP (purchasing power parity) : $8.518 billion (2006 est.)
GDP (official exchange rate) : $5.473 billion (2006 est.)
GDP - real growth rate : 2.9% (2006 est.)
GDP - per capita (PPP) : $21,300 (2006 est.)
GDP - composition by sector : agriculture: 2.7%
industry: 22.3%
services: 74.9% (2003 est.)


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