Annual growth in business activity stood close to its long-term average – CBM’s Economic Update

The Bank’s Business Conditions Index shows that in October, annual growth in business activity rose marginally when compared with September and stood close to its historical average.

The European Commission’s economic sentiment indicator for Malta increased and stood above its long-term average. Meanwhile, the employment expectations indicator fell in October but remained above its long-term average.

Price expectations were mixed across sectors, with the largest increase recorded in industry.

In September, both industrial production and retail trade rose on a year earlier. In August, annual growth in services production moderated compared to July. The unemployment rate remained low from a historical perspective. It was unchanged when compared with August and below the rate from a year earlier.

In September residential permits were above their year-ago level. In October, the number of residential promise-of-sale agreements were above those of a year earlier while the number of final deeds were below those of the same month a year ago.

During the 12 months to August, annual growth in Maltese residents’ deposits, forming part of the broad monetary aggregate M3, accelerated. Credit to Maltese residents, rose at a slower pace when compared to the preceding month, reflecting lower growth in credit to general government and other residents.

In October, the annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) rose to 2.4%. While overall inflation in Malta exceeded the euro area average, HICP inflation excluding food and energy stood at 2.2% – well below the corresponding rate in the euro area. According to the Retail Price Index (RPI), inflation in October stood at 1.6%, up from 1.2% in September.

In September, the Consolidated Fund recorded a slightly higher surplus compared with a year earlier, as a rise in government revenue slightly outweighed an increase in government expenditure.