Provisional figures for FDI in Malta from the rest of the world resulted in a net inflow of Lm614.2 million (€1,430.8 million) in 2006 against a net inflow of Lm233.5 million (€543.9 million) recorded during the previous year. This was mainly due to equity capital acquisitions of Lm392.7 million (€914.7 million) during 2006 or Lm258.0 million (€600.9 million) more than the previous year. Reinvested earnings remained on the same level with a total of Lm32.3 million (€75.3 million) for both years. Due to loans advanced by the direct investors in 2006, the other capital component increased by Lm122.7 million (€285.9 million) over the year 2005.

During the first nine months of 2007, FDI inflows totalled Lm275.9 million (€642.6 million) compared to Lm508.1 million (€1,183.5 million) registered in 2006. This shortfall was mainly due to a combination of lesser equity capital injections, more trade debits with foreign group companies and lower borrowing transactions from the direct investors. However, due to undistributed profits, reinvested earnings totalled Lm86.4 million (€201.3 million) or Lm66.8 million (€155.7 million) more than the same period in 2006.

A glance at FDI inflows broken down by country shows that direct investment in 2006 was mainly coming from non-EU countries totalling Lm546.8 million (€1,273.8 million) as compared to Lm226.8 million (€528.3 million) in 2005. FDI flows from EU Member States amounted to Lm67.4 million (€157.0 million) in 2006 against Lm6.7 million (€15.6 million) in 2005. Analysing the first nine months of 2007, FDI flows showed a reversal of this trend, with Lm172.5 million (€401.9 million) coming from the EU Member States, while Lm103.4 million (€240.7 million) originated from non-EU countries. From the perspective of the economic activity as shown in Table 3, the main receiver of FDI in 2006 was the financial intermediation sector amounting to Lm379.6 million (€884.2 million) compared to Lm154.6 million (€360.1 million) in 2005. On the other hand, between January and September 2007, the other activities sector was the main receiver totalling Lm106.5 million (€248.0 million).

The provisional FDI stock position in Malta increased by Lm551.6 million (€1,284.9 million) in 2006 over the previous year, to stand at Lm2,116.7 million (€4,930.6 million). FDI stock position in Malta accredited to EU Member States amounted to Lm1,172.2 million (€2,730.6 million) at the end of 2006 or Lm28.5 million (€66.3 million) more than at the end of 2005. Furthermore, FDI attributed to non-EU countries amounted to Lm944.4 million (€2,200.0 million), Lm523.1 million (€1,218.5 million) more than that registered in 2005.

Direct Investment Abroad

In 2006, direct investment abroad by Maltese residents shifted upwards by Lm2.3 million (€5.3 million) against a net decrease of Lm7.1 million (€16.6 million) in 2005. The main variation was the other liabilities to direct investors due to a net increase of Lm4.7 million (€11.0 million) in 2006 as opposed to a net increase of Lm27.3 million (€63.5 million) during the previous year. Between January and September of 2007, direct investment abroad increased by Lm1.9 million (€4.5 million).

Also in 2006, direct investment abroad in EU Member States rose by Lm1.3 million (€2.9 million) against a net decline of Lm12.6 million (€29.3 million) in 2005. Conversely, direct investment outside the EU increased by Lm1 million (€2.4 million) and Lm5.4 million (€12.7 million), in 2006 and 2005 respectively. During the first nine months of 2007, direct investment abroad in the EU increased by Lm3.4 million (€8.0 million) whilethat in non-EU countries fell by Lm1.5 million (€3.6 million).

The principal direct investor abroad was the hotels, restaurants and real estate sector which recorded a net outflow of Lm3.4 million (€8.0 million), whereas the financial intermediation sector accounted for a net investment abroad of Lm9.6 million (€22.4 million) in 2005.

Turning to the direct investment stock position abroad. At the end of 2006, this amounted to Lm373.0 million (€868.8 million); with Lm126.2 million (€294.1 million) directed to the European Union and Lm246.7 million (€574.7 million) invested in non-EU countries. This entails a total net improvement of Lm12.1 million (€28.2 million) over the previous year