The Economy of Malta from 1998 to 2002

Checking out the performance of any national providence approximately the world whizz can encounter a king-size amount of im counter eternal rests from category to flesh of field of battle and some numerical gaps which some of the time, no matter what they cannot be cover. Each political sympathies in the world chooses to stick in different aspects of the parsimony in target to show that the economy is either doing swell up or not. In wander for something like that to happen the government activity must present the uncouth domestic product, the national head for the hills out deficit or surplus, the ostentation dictate, the unemployment tramp and eternally to present net exports. It is in any case important for individu anyy economy to admit where there ar problems in the economy and how these problems can be faced in order for the a howeverting fiscal course of study to be more prosperous than the wiz that went by. In the fol upseting economical res earch project we argon sledding to study and analyze the primary criteria of the performance of a certain demesne. We nuclear number 18 going to look at the gross domestic product, the gross domestic product in hindquarters of growth, the government debt, the evolution of the balance of payments during the days being analyse and the evolution of the change over step in terms of the US dollarThe economy which has been chosen to be examine is that of Malta. It was chosen because it is an island and so, the economy, logically is a closed one. To my surprise, economy of Malta is e rattlingthing exclusively a closed economy, since all elementary call for of the citizens of Malta are covered by imports, since only 20% of the gross provender needs are covered by in-state production. So, from the class 1998 until the twelvemonth 2002 the balance of payments was -$130mn. This shows that the imports in Malta were a great deal macroscopicr than the imports, which make outs a compute deficit in the plain. In general,! this means that Malta owes to the US, Italy, Germany and France (Malta?s basic trade allies) a total of $130mn,If we notice the gross domestic product of the country during these 5 age, we allow for notice that there is a gross domestic product overall growth deem at 2.2% in total. This shows that the get power of the Malta citizens grew from 1998 to 2002 by 2.2%. This has as a result for the year 2002 for the purchasing power parity of the government of Malta to be at $7bn and the per capita purchasing power parity at $17,000. The division of the GDP by sector is at 2.8% for the agricultural, 25.5% for the industrial and 71.7% for the services. This shows us that Malta has a whacking apprehend force in the service sector. As previously stated, there was a cypher deficit of $130mn by the end of 2002 which is approximately 1.3% of the GDP for that year. The fact that the government has this sizeable of a debt for these eld shows that the net imports of the country were by practically larger than the small amount of exports during that period of time. We notice, although, that the debt drops from year to year and so we down a debt of the scale of $168mnin the year 1998 and a debt of the scale of $130mn in 2002. This shows the increase of export production in Malta during the age. This too has a positive lure on the unemployment rate, since in 1998 it was at 9.2% and in 2002 at 7% of the total beat back force. The balance of payments comes down to the following put over and map which analyzes the balance of payments from 1998 until 2002. Note that the numbers are in thousands of Malta lira (Lm). The table above shows us that Malta was or soly in debt during the 5 years being studied. This means that the country had more imports than exports and also more national expenditure than revenue, which money is being dog-tired on the development and upgrading of the country. This may dedicate a contradict answer on the economy, but it has a posit ive influence on the wellbeing of the citizens. The e! conomy of a country is reflected from the exchange rate that it has with the main strong currencies of the world. The strongest currentness for the past 60 years has been the US dollar ($US), and so, the comparison we are going to bring forth is on the exchange rate amongst the $US and the Lm. This diagram shows us the rates at which the Malta lira is sold for one US dollar. As we can see, the affinity began from 0.385, rose all the way to 0.4501 and then dropped down to 0.4336 in 2002.

This shows us a comparatively smooth transition among t years in terms of the exchange rate and so, we can secern that, especi ally in 2001 the Malta lira had a quite large withdraw in terms of the US dollar. This is very achievable, since, as previously stated, the largest economic ally of Malta is the unite States, and so, most trades of goods of Malta are with the United States, so the Malta lira has demand in terms of the dollar. We can see from the two figures above, that as the BOP drops or rises, the exchange rate falls or goes up respectively. This is very logical, since when there is a large cipher deficit, a large drop in the currency takes place, so that the demand of the currency increases and so, the national debt is taken care of. It is also very possible that when a country has a budget surplus, for an increase in the exchange rate to take place. utmost we can notice that in general, the economy of Malta has a relatively (compared to other countries) stalls economy. This is very possible because Malta is in the surgical operation of entering the European Currency Union. Due to this, th e government has to butt on certain requirements, m! uch(prenominal) as that it has to have a relatively persistent economy and the national debts to be at a certain, relatively low point. This is very important for Malta, since the entrance in the EU volitioning open new economic frontiers for the country, as it entrust have as economic allies all the members of the EU. This will have as a result, an increase in exports (possibly), but most importantly cheaper imports, since taxation on imported products will be abolished. The general picture that Malta presents is one that can create an shape of a steadily growing economy, especially since the inflation rate is steady around 2%. BibliographyTreasury Budget contribution of Maltawww.nso.govwww.cia.govEconomics by Gregory N. Mankiw If you want to get a full essay, order it on our website: OrderCustomPaper.com

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