The financial services sector plays a major role in the Maltese economy. This sector expanded by approximately 36% in terms of value added over the past six years.

This publication presents a review of the economic contribution of the financial services sector in Malta placing a special emphasis on the direct, indirect and induced effects generated both at an aggregate and at a sub-sectoral level. This study also presents a review of the input and output structure of the sector and how it relates to other sectors in the economy.

The picture that emerges is that of a sector largely dominated by the activities of credit institutions, investment funds and special purpose entities. However, in recent years auxiliary services, pensions and insurance business appear to be outpacing the dominant activities in terms of growth. At a sub-sector level, the findings suggest that the total effect of an increase in final demand appears to be greater for the insurance business, pensions and auxiliary financial services. This is true not only in terms of gross value added but also for employment and income, which in turn, has policy implications.

Furthermore, when taking into account the direct, indirect and induced effects, as well as the size of the sector, the total contribution of the financial services sector is estimated at 11.6% based on SIOT (2010), ranking amongst the highest in the Maltese economy.

The full document can be downloaded Research Paper - The contribution of the Financial Services sector to the economy.