29/05/2024

Central Bank of Malta issues May Economic Update

Annual growth in business activity declined slightly

The Bank's Business Conditions Index indicates that in April, annual growth in business activity declined marginally, and remained slightly below its long-term average. 

The European Commission's economic confidence indicator fell in April, and remained below its long-term average. The Commission's employment expectations indicator also stood below its long-run average. 

Month on month price expectations increased among consumers, and to a lesser extent in the retail and services sectors, but decreased significantly in the construction sector and to a lesser extent in industry. 

Developments in activity indicators were mixed. In March, both industrial production and retail trade contracted on a year earlier. However, unemployment remained low from a historical perspective. 

Residential permits were higher in March compared with their year-ago level. In April, the number of residential promise-of-sale agreements and the number of final deeds of sale rose on a year earlier. 

During the 12 months to March, Maltese residents' deposits, forming part of the broad monetary aggregate M3, increased due to higher balances belonging to households and non-financial corporations. The annual rate of change moderated compared to February. By contrast, credit to Maltese residents increased at a slightly faster pace compared with a month earlier. 

In April, the annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) fell to 2.4% and is now in line with the euro area average, while HICP excluding energy and food, remained below the euro area average. Meanwhile, inflation, according to the Retail Price Index (RPI), decreased to 1.6%, the lowest rate since July 2021. 

In March, the Consolidated Fund recorded a lower deficit compared to a year earlier. 

The full Economic Update is available here.

 

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