CBM issues February Economic Update: Economic sentiment at the highest level recorded

The bank’s Business Conditions Index shows that in January, annual growth in business activity edged up slightly from the preceding month and stood above its historical average.

In January, the European Commission’s Economic Sentiment Indicator increased from a month earlier and reached the highest level recorded. Meanwhile, the Employment Expectations Indicator rose and stood above its long-term average. Its Economic Uncertainty Indicator (EUI) reached a historic low, indicating low uncertainty surrounding financial and business decisions.

In December, industrial production contracted, though at a smaller rate, while annual growth in retail trade accelerated. In November, services production declined and reversed a brief recovery observed in the preceding month.

The unemployment rate in December rose marginally compared with November, but at 3.2% remained low from a historical perspective.

In December, permits for residential buildings rose from their year-ago level. In January, both the number of residential promise-of-sale agreements and the number of final deeds of sale increased on a year earlier.

The annual rate of change of Maltese residents’ deposits and credit in December increased compared with November.

The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) stood at 2.3% in January, down from 2.5% in December. HICP inflation excluding food and energy stood at 2.2%. While overall HICP inflation was above that in the euro area, HICP inflation excluding food and energy in Malta was in line with the euro area. According to the Retail Price Index (RPI), inflation stood at 2.5% in January, down from 2.7% in December.