28/03/2025 09:37:00

Central Bank of Malta issues March Economic Update

Annual growth in business activity is in line with its long-term average

The Bank's Business Conditions Index shows that in February, annual growth in business eased slightly, broadly converging to its historical average. The Bank's Economic Policy Uncertainty Index, an indicator that monitors economic policy uncertainty by synthesising information gleaned from Maltese news portals, increased from its January level but remained below its historical average.

The European Commission's Economic Sentiment Indicator for Malta decreased and stood below its long-term average. The Employment Expectations Indicator also decreased in February but remained above its long-term average.

In January, industrial production and retail trade increased at a slower pace compared to December. In December, the annual rate of change of services production turned positive. The unemployment rate was unchanged from the preceding month, and low from a historical perspective, at 3.0%.

In January permits for residential buildings were above their year-ago level. In February, the number of residential promise-of-sale agreements were higher than that of a year earlier, while the number of final deeds was largely unchanged.

During the 12 months to January, Maltese residents' deposits, and credit granted by monetary and financial institutions in Malta increased at a strong pace. In both cases, the annual rate of change rose compared to December.

In February, the annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) rose to 2.0% from 1.8% a month earlier, while HICP inflation excluding energy and food was unchanged at 2.0%. Both measures stood below the euro area average. According to the Retail Price Index (RPI), inflation in February rose to 1.9%, from 1.4% in January.

In January, the Consolidated Fund recorded a higher deficit compared with a year earlier, as a rise in government expenditure was coupled with a decline in government revenue.

The full Economic Update is available here.

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