27/06/2025 08:58:00

Central Bank of Malta issues June Economic Update

Business activity slightly above-average, while uncertainty declines

The Bank's Business Conditions Index shows that in May, annual growth in business activity declined slightly 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, dropped from its April level to just under its historic average.

In May, the European Commission's Economic Sentiment Indicator declined while the Employment Expectations Indicator rose, with the former falling below its long-term average, and the latter rising above it.

In April, industrial production contracted for the first time since mid-2024, while retail trade grew marginally. In March, services production contracted on a year earlier for the second consecutive time.

In April, the unemployment rate reached a new historic low of 2.7%.

Meanwhile, permits for residential buildings rose when compared to their year-ago level. In May, the number of residential promise-of-sale agreements and final deeds of sale increased on a year earlier.

In April, the annual rate of change in Maltese residents' deposits edged up compared with March, while growth in credit granted by monetary and financial institutions in Malta remained unchanged, but high.

In May, the annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) rose to 2.7% from 2.6% a month earlier, while HICP inflation excluding food and energy stood at 2.7%. Both indices stood above the euro area average. According to the Retail Price Index (RPI), inflation remained unchanged at 2.4% in May.

In April, the Consolidated Fund recorded a slightly larger deficit compared with a year earlier, as a rise in government expenditure offset a smaller increase in government revenue.

The full Economic Update is available here.

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