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News - Economic Update 2020

21/02/2020

Economic Update: Issue 2/2020

In January the Central Bank of Malta’s Business Conditions Index (BCI) was unchanged when compared with the previous month and continued to suggest that economic conditions remained close to their long-term average.

The European Commission’s Economic Sentiment Indicator remained below its level a year earlier but increased strongly, recovering most of the decline recorded in December. Similar to the BCI, it stood slightly below its long-term average. In January, confidence improved significantly in the retail and in the services sectors, and to a lesser extent in industry and among consumers.

The Economic Update reports significant annual growth in the number of tourist arrivals and expenditure in December. The index of industrial production and the volume of retail trade rose at a faster pace in annual terms.

Conditions in the labour market continued to be favourable. The seasonally-adjusted unemployment rate fell marginally to 3.4% in December, from 3.5% in the previous month. The number of gainfully occupied continued to grow strongly, rising by 5.2% in August 2019.

The annual inflation rate based on the Harmonised Index of Consumer Prices remained unchanged at 1.3% in December, while the inflation rate based on the Retail Price Index, which is the more relevant measure of consumer price inflation for domestic households, moderated to 1.2%.

The publication also looks at public finance developments and notes that a lower deficit was recorded on the Consolidated Fund in November, when compared with the same month in 2018. Government debt, however, closed the month higher in absolute terms relative to October 2019, following a new issue of Malta Government Stocks.

The full Economic Update, which also reports on international trade and financial markets, is available on the website of the Central Bank of Malta.

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