News - News Releases 2021


CBM Issues November Economic Update

The Bank's Business Conditions Index shows that in October annual growth in business activity is gradually receding from recent highs but remains strong from a historical perspective. Nevertheless, the level of aggregate economic activity remained below pre-pandemic levels.

The European Commission's confidence survey shows that sentiment eased in October compared with a month earlier, but remained well above its year-ago level and its long-term average. When compared with September, confidence fell in services and to a lesser extent among retailers. Nevertheless, sentiment remained positive in all sectors.

The Bank's estimate of the COVID-19 Government Response Index - a composite indicator that summarises various containment, economic and health-related measures introduced in response to the pandemic - remained unchanged from its level a month earlier and stood marginally below that reported in the euro area.

In October, the number of final deeds of sale for residential property rose on an annual basis. By contrast, promise-of-sale agreements decreased, though remaining above their level in October 2019. In September, residential permits rose on their year-ago level while commercial permits fell.

In the same month, industrial production contracted on an annual basis for the second consecutive month. Meanwhile, the volume of retail trade rose at a slower, though still strong pace.

The number of registered unemployed persons declined both when compared with August and when compared with a year earlier. The unemployment rate fell marginally to 3.2% in September and stood below its pre-pandemic level.

The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) stood at 0.7% in September, up from 0.4% in August, while that based on the Retail Price Index rose to 2.2% from 2.1% a month earlier. The difference between the two measures of inflation mostly reflects technical factors related to the revision of HICP weights in 2021.

The Economic Update also includes data on recourse to the moratorium on loan repayments offered by domestic credit institutions to residents of Malta in response to COVID-19. The value of household and corporate loans subject to a moratorium reached very low levels at the end of September. At €38.8 million, these were equivalent to only 0.3% of related outstanding loans. This reflects a recovery in income flows and the expiration of the moratoria period for certain beneficiaries. By the end of the month, 652 facilities for working capital and loan repayment purposes had been granted to businesses impacted by the pandemic under the Malta Development Bank COVID-19 Guarantee Scheme, corresponding to total sanctioned amounts of €508.8 million, or 65.4% of the scheme's target size.

The full Economic Update is available here.

CBM Issues November Economic Update

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