28/02/2025 11:28:00

Central Bank of Malta issues February Economic Update

Annual growth in business activity stood above its long-term average

The Bank's Business Conditions Index shows that in January, annual growth in business activity increased and stood slightly 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, stood well below its historical average.

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

In December, industrial production increased at a slower pace compared to November, while retail trade rose at a faster pace. In November, the annual rate of change of services production turned negative. The unemployment rate remained low from a historical perspective, at 3.0%.

In December permits for residential buildings were above their year-ago level. In January, both the number of residential promise-of-sale agreements and the number of final deeds were below that of a year earlier.

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

In January, the annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) remained unchanged from a month ago at 1.8%, while HICP inflation excluding energy and food stood at 2.0%. Both measures stood firmly below the euro area average. According to the Retail Price Index (RPI), inflation in January rose to 1.4%, from 1.2% in December.

The full Economic Update is available here.

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