29/08/2025 12:15:00

Central Bank of Malta issues August Economic Update

Business activity index falls but still above average

The Bank's Business Conditions Index shows that in July, annual growth in business activity fell, but remained 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 sharply from its June level and stood above its historical average.

In July, both the European Commission's Economic Sentiment Indicator and the Employment Expectations Indicator fell on a month earlier and stood below their long-term average.

In June, industrial production and retail trade rose in annual terms. In May, services production contracted on a year earlier for the fourth consecutive time.

In June, at 2.5%, the unemployment rate reached a new historical low.

Permits for residential buildings in June increased from their year-ago level. In July, the number of residential promise-of-sale agreements and final deeds of sale also increased on a year earlier.

In June, the annual rate of change in Maltese residents' deposits remained unchanged compared with May, while growth in credit granted by monetary and financial institutions in Malta increased marginally.

In July, the annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) stood at 2.5%, unchanged from the previous month, while HICP inflation excluding food and energy stood at 2.4%. Both indices stood above the euro area average. According to the Retail Price Index (RPI), inflation remained unchanged at 2.4% in July.

In June, the Consolidated Fund registered a wider deficit than that registered a year earlier, due to a decline in government revenue and a strong rise in government expenditure.

The full Economic Update is available here.

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