16/05/2024 14:25:00

Central Bank of Malta publishes its Quarterly Review on economic developments in the final quarter of 2023

During the fourth quarter of 2023 the Maltese economy expanded at a more moderate pace when compared to the previous quarter. When adjusting for imports, exports was the main contributor to economic growth, while domestic demand had a marginally positive impact. The Bank's estimate of the output gap indicates that the degree of over-utilisation of the economy's productive capacity was smaller when compared with the previous quarter.

The Bank's Business Conditions Index and the European Commission's Economic Sentiment Indicator stood slighlty above their respective long-term average.

Developments in the labour market remained positive, and conditions remain tight.

Consumer price pressures in the fourth quarter eased further, but inflation remained high from a historical perspective and above the European Central Bank's (ECB) 2% inflation target.

The general government deficit-to-GDP ratio and the debt-to-GDP ratio rose when compared with the third quarter of 2023, but declined over the year as a whole. Malta's debt ratio was below the euro area average, while its deficit ratio stood above it.

Whereas Malta's GDP rose on the same quarter a year earlier, that in the euro area was broadly unchanged. According to the Labour Force Survey, employment growth in Malta was higher than the euro average while the unemployment rate was lower. However, HICP inflation was higher as energy inflation stood negative in the euro area, whereas in Malta it remained nil with unchanged energy prices.

Following ten consecutive hikes, the ECB's Governing Council kept the three key ECB interest rates unchanged in the fourth quarter of 2023. ECB policy rates also remained unchanged during the first quarter of 2024.

The second issue of the Quarterly Review for 2024 is available on the Bank's website.

For more recent indicators consult the Economic Update.

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