13/11/2026 09:12:00

Central Bank of Malta publishes its Quarterly Review on economic developments for the second quarter of 2026

During the second quarter of 2026, annual real Gross Domestic Product (GDP) rose at a faster pace when compared with the preceding quarter, with growth being driven by domestic demand, even after adjusting for imports. The pace of economic expansion remained above that in the euro area.

The Bank's Business Conditions Index moderated compared with the first quarter, indicating that the pace of economic activity during the second quarter remained broadly in line with its long-run average.

During the second quarter of 2026, the labour market continued to perform positively, with activity and employment rates rising and standing above those in the euro area. The unemployment rate increased from a year earlier but remained well below that in the euro area. Labour market conditions remained tight but showed some signs of moderation, with both the vacancy rate and the labour market tightness indicator decreasing.

Consumer price inflation moderated during the second quarter of 2026. Annual HICP inflation declined to 2.0% in June from 2.3% in March, while HICP inflation excluding energy and food also decreased, standing at 2.2% in June from 2.4% previously. Both headline HICP inflation and HICP excluding energy and food stood below the euro area average.

In the first quarter of 2026, the general government deficit-to-GDP ratio on a four-quarter moving sum basis, widened from the first quarter of 2026 and stood broadly in line with the euro area average. Meanwhile, the debt-to-GDP ratio increased from the previous quarter but remained well below the corresponding average in the euro area.

In response to the inflationary pressures generated by the war in the Middle East, the Governing Council has tightened the monetary policy stance by raising the three key European Central Bank (ECB) interest rates by 25 basis points in both its June and September meetings.

The fourth issue of the Quarterly Review for 2026 is available on the Bank's website.

For more recent indicators kindly consult the Economic Update.

Back to Archive