28/03/2022

Central Bank of Malta issues March Economic Update

The Bank’s Business Conditions Index for February indicates that annual growth in business activity remains above its long-term average, though it has receded from the high levels registered in the first half of 2021.

The European Commission’s Confidence Survey shows that economic sentiment in Malta rose in February when compared with a month earlier. It also stood well above its year-ago level and its long-term average. When compared with December confidence improved across all sectors except in the construction sector, where sentiment eased but remained positive.

The European Commission’s Uncertainty Indicator for Malta rose when compared with January. Higher uncertainty was largely driven by developments in industry and, to a lesser degree, in the construction sector and among consumers. By contrast, the indicator edged down among retailers and, to a smaller degree, in the services sector.

In January, industrial production contracted though at a slower annual rate when compared with December. Meanwhile, the volume of retail trade rose at a faster pace than previously.

The unemployment rate fell to 3.1% in January – marginally lower than the rate registered in the previous month and well below its pre-pandemic level.

In February, the number of final deeds of sale for residential property rose while the number of promise-of-sale agreements fell on an annual basis. Both commercial and residential permits increased in January relative to their year-ago levels.  

The annual inflation rate based on the Harmonised Index of Consumer Prices stood at 4.2% in February, marginally up from 4.1% in the previous month. Inflation based on the Retail Price Index rose to 4.2% in February from 3.9% a month earlier.

The Consolidated Fund deficit in January 2022 narrowed significantly when compared with a year earlier, mainly due to the timing of selected expenditure items but also reflecting higher tax revenue.

Annual growth in residents’ deposits and credit remained strong in January, at 9.7% and 8.1%, respectively. By the end of the month 653 facilities had been granted in terms of the Malta Development Bank COVID-19 Guarantee Scheme, corresponding to total sanctioned amounts of €505.5 million, or 65.0% of the scheme’s target size.

The full Economic Update is available here.

Back to Archive