28/05/2025 09:00:00

Central Bank of Malta issues May Economic Update

Business activity remained positive, against higher economic policy uncertainty

 

The Bank's Business Conditions Index shows that in April, annual growth in business activity rose slightly and stood moderately above its historical average. The Bank's Economic Policy Uncertainty Index, an indicator that monitors economic policy uncertainty by synthesising information gleaned from Maltese news portals, rose from its March level and reached the highest level recorded this year, largely reflecting heightened global geopolitical tensions due to changes in trade tariffs.

In April both the European Commission's Economic Sentiment Indicator and the Employment Expectations Indicator decreased slightly. While the former remained above its long-term average, the latter stood below it.

In March, industrial production rose at a faster pace compared to February, while growth in retail trade turned positive. In February, services production contracted on a year earlier following successive periods of growth.

In March, the unemployment rate remained unchanged at 2.8% when compared with the preceding month but stood below that recorded in the same month a year earlier.

Meanwhile, permits for residential buildings rose when compared to their year-ago level. In April, the number of residential promise-of-sale agreements increased on a year earlier, while the number of final deeds of sale was lower.

During the 12 months to March, Maltese residents' deposits rose at a faster pace compared to February, while the annual rate of credit granted by monetary and financial institutions in Malta remained unchanged.

In March, the annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) rose to 2.6% from 2.1% a month earlier, while HICP inflation excluding food and energy stood at 2.5%. While overall inflation in Malta stood above that in the euro area, HICP inflation excluding food and energy stood below the euro area average. According to the Retail Price Index (RPI), inflation rose to 2.4% in April, from 2.1% in March.

In March, the Consolidated Fund recorded a larger deficit compared with a year earlier, as a rise in government expenditure offset a smaller increase in government revenue.

The full Economic Update is available here.

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