Annual growth in business activity broadly unchanged

CBM issues June Economic Update

The Bank’s Business Conditions Index indicates that in May, annual growth in business activity was broadly unchanged around its long-term average.

The European Commission’s economic confidence indicator for Malta rose in May but remained below its long-term average. The Commission’s employment expectations indicator fell and remained below its long-run average.

Price expectations decreased across all sectors, bar the construction sector. The largest decreases were recorded in the services sector and among consumers.

Developments in activity indicators were positive. In April, industrial production and retail trade rose on a year earlier. Unemployment remained low from a historical perspective.

Residential permits were lower in April compared with their year-ago level. In May, the number of residential promise-of-sale agreements and the number of final deeds of sale were below those a year earlier.

During the 12 months to April, Maltese residents’ deposits, forming part of the broad monetary aggregate M3, increased due to higher balances belonging to households and non-financial corporations. Credit to Maltese residents continued to increase at a swift rate, driven by an expansion in loans to government and other sectors.

In May, the annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) fell marginally to 2.3%, while HICP excluding energy and food, remained firmly below the euro area average. Meanwhile, inflation, according to the Retail Price Index (RPI), decreased to 1.5%, the lowest rate since June 2021.

In April, the Consolidated Fund recorded a lower deficit compared to a year earlier.

The full Economic Update is available here.