Annual growth in business activity slightly above long-term average, Central Bank says

The Central Bank of Malta’s Business Conditions Index indicates that in December, annual growth in business activity was slightly above its long-term average, the CBM said in a statement Monday.

The European Commission’s economic confidence indicator rose in December, and stood above its long-term average. Employment expectations also increased when compared with a month earlier.

Price expectations rose among firms in the services sector and consumers but declined in the remaining sectors compared with November. Compared with the average for 2022, price expectations in 2023 declined significantly in retail and in industry but rose strongly in the construction sector.

Developments in activity indicators were mixed, as industrial production rose at a slower pace on a year earlier, while retail trade rose following a contraction a month earlier. Labour market conditions remained favourable in November.

Residential and commercial permits declined in November compared with their year-ago level. In December, the number of promise-of-sale agreements and the number of final deeds rose on a year-on-year basis, the bank said.

In November, Maltese residents’ deposits, forming part of the broad monetary aggregate M3, stood below their year ago level. This decline reflects lower balances held by financial intermediaries and, to a lesser extent, those belonging to firms. Meanwhile, annual growth in credit to Maltese residents increased at a slower pace compared with a month earlier.

In December, the annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) declined further to stand at 3.7%. Inflation according to the Retail Price Index (RPI) remained unchanged at 3.6%.

In November, the Consolidated Fund recorded a larger deficit compared to a year earlier, as expenditure rose while revenue declined.