30/04/2025 07:50:00

Central Bank of Malta issues April Economic Update

Annual growth in business activity above its long-term average

The Bank's Business Conditions Index shows that in March, annual growth in business improved slightly and stood moderately above 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, rose from its February level and exceeded its historical average for the first time this year, largely reflecting heightened global geopolitical tensions from trade tariffs.

In March both the European Commission's Economic Sentiment Indicator and the Employment Expectations Indicator for Malta increased above their long-term average.

In February, industrial production rose at a faster pace compared to January, while growth in retail trade turned negative. In January, the annual rate of change of services production was more moderate compared to the previous month.

In February, the unemployment rate fell to 2.7% and was lower than that in the preceding month and the same month a year earlier.

Meanwhile, permits for residential buildings more than halved when compared to their year-ago level. In March, the number of residential promise-of-sale agreements decreased on the same month a year earlier, while the number of final deeds fell marginally.

During the 12 months to February, Maltese residents' deposits and credit granted by monetary and financial institutions in Malta increased at a strong pace. While the annual rate of change for residents' deposits was smaller compared to January, the annual growth rate for credit was marginally higher.

In March, the annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) rose to 2.1% from 2.0% a month earlier, while HICP inflation excluding energy and food also edged up to 2.1%. Both measures stood below the euro area average. According to the Retail Price Index (RPI), inflation rose to 2.1% in March, from 1.9% in February.

In February, the Consolidated Fund recorded a smaller surplus compared with a year earlier, as a rise in government expenditure was coupled with a decline in government revenue brought about by timing issues.

The full Economic Update is available here.

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