Alcohol, tobacco and food record highest annual inflation in July

In July 2025, the highest annual inflation rates were recorded in the food sector (3.8 per cent) and in the alcohol and tobacco sector (3.8 per cent).

These were followed by a 3.2 per cent increase in other goods and services and 2.7 per cent in personal care and health.

By contrast, the lowest annual inflation was observed in water, electricity, gas and fuels, which remained unchanged at 0.0 per cent. Furnishings and household equipment saw a modest increase of 0.4 per cent.

Malta’s Retail Price Index (RPI) remained unchanged in July 2025 compared with the previous month, with annual inflation holding steady at 2.4 per cent, according to new figures from the National Statistics Office (NSO).

The RPI tracks changes in the cost of a basket of goods and services for the typical household and is used to adjust wages and rents in line with inflation.

Despite steady inflation in July, the NSO data shows that the pace of inflation has eased from the higher rates seen in 2023. The 12-month moving average fell to 1.8 per cent in June 2025, down from 2.7 per cent in 2024, and well below the 6.6 per cent recorded in July 2023.

While inflation has moderated compared to the post-pandemic highs, sustained increases in essential categories like food and housing may continue to pressure household budgets.

Businesses, particularly in retail and hospitality, are likely to feel the impact of these shifts in consumer purchasing power, even as overall inflation stabilises.