20/04/2023

Central Bank of Malta launches its Annual Report for 2022

The Central Bank of Malta has released its Annual Report for 2022, during a launch held at the Central Bank of Malta, Binja Laparelli, Valletta on 20 April 2023. The event was addressed by the Central Bank of Malta Governor, Professor Edward Scicluna, Deputy Governor for Monetary Policy Mr Alexander Demarco, Deputy Governor for Financial Stability Mr Oliver Bonello, and Chief Economist Dr Aaron Grech.

The Annual Report for 2022 includes detailed financial statements, an analysis of economic, monetary and financial developments in Malta and abroad.

The launch was attended by officials from credit institutions, diplomats, stockbrokers, economists, social partners, and other socio-economic operators. The launch included a Q&A session for the attendees and journalists.

Governor, Professor Edward Scicluna, addressing the audience

The Bank’s Chief Economist, Dr Aaron Grech, gave an account of economic growth which moderated in 2022 after the strong rebound from the pandemic seen in 2021. Domestic demand, though, remained resilient. Inflation reached unusually high levels last year but is expected to moderate to just above 2% by 2024.

Chief Economist, Dr Aaron Grech

Mr Oliver Bonello, Deputy Governor for Financial Stability, focused on recent developments in the banking sector. He emphasised the continued resilience of the system which operates with ample liquidity and strong capital buffers. Asset quality and profitability improved but cyclical vulnerabilities persist. These are in turn being addressed by appropriate macroprudential policy measures.

Deputy Governor for Financial Stability, Mr Oliver Bonello

In his presentation, the Deputy Governor for Monetary Policy, Mr Alexander Demarco, explained that in view of the Bank's commitment to the price stability objective through interest rate increases during 2022, the Central Bank of Malta, like most other central banks in the Eurosystem, had a contraction in its balance sheet. He also stated that a release from provisions to balance the Profit and Loss Account was required.

Deputy Governor for Monetary Policy, Mr Alexander Demarco

The Governor, Professor Edward Scicluna, said that inflation in the euro area peaked at 10.6% during 2022. This reflected higher energy costs and rising food commodity prices. The ECB's Governing Council took firm decisions by raising interest rates to achieve its inflation objective of 2% over the medium term. The transmission of monetary policy on financial markets, including household and firms lending rates, was effective generally throughout the euro area, with the response in Malta being slower. Although inflation rates have peaked, they are still too high, and one would expect the ECB to continue with further tightening.   

Governor, Professor Edward Scicluna

Photos: Melvin Bugeja

The Annual Report 2022 can be found here.

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