30/05/2023

Central Bank of Malta issues May Economic Update

The Bank's Business Conditions Index indicates that in April, annual growth in business activity rose further above its long-term average, estimated since January 2000.

The European Commission's confidence surveys show that economic sentiment in Malta rose in April when compared with a month earlier, and stood above its long-term average, which is estimated since November 2002. In month-on-month terms, sentiment increased across all sectors, bar in the services sector.

Additional survey information shows that in April, price expectations stood firmly above their year-ago level in the construction sector, and to a lower extent, among services firms. By contrast, price expectations in industry, the retail sector, and among consumers stood significantly lower.

The European Commission's Uncertainty Indicator for Malta increased compared with March, though it was still lower than last year's April level. Uncertainty increased mostly in industry.

In March, both industrial production and retail trade rose on a year-on-year basis, though the rate of growth was slower when compared with February. The unemployment rate stood at 2.9% in March, marginally lower than the rate of 3.0% registered in the previous month, and in March 2022.

Commercial building and residential permits decreased in March relative to their year-ago level. In month-on-month terms, commercial permits increased while residential permits declined.

In April, the number of promise-of-sale agreements rose on a year-on-year basis, while the number of final deeds of sales fell. Meanwhile, they both fell on a month-on-month terms.

The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) stood at 6.4% in April, down from 7.1% in the previous month. On the other hand, inflation based on the Retail Price Index (RPI) edged down to 5.8%, from 7.0% in March.

In March, the deficit on the Consolidated Fund narrowed when compared with a year earlier, as higher government revenue outweighed a smaller rise in government expenditure.

Annual growth in Maltese residents' deposits expanded at a slower rate of 1.6% in March. Meanwhile, annual growth in credit to Maltese residents moderated to 5.4%.

The full Economic Update is available here.

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