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In May, business conditions were positive as Malta’s economy continued to recover from the COVID-19 economic impact, the Central Bank of Malta (CBM) noted in its latest Economic Update.

Backing up this point, it highlighted the latest Economic Commission data showing that sentiment was positive across all sectors, except for retail, which stood marginally negative.

Overall, the CBM noted that economic sentiment edged down in May, but remained above its long-term average.

COVID-19 Government Response

Turning to its estimate of the COVID-19 Government Response Index, a composite indicator that summarises various containment, economic and health-related measures introduced in response to the pandemic, the CBM lowered the Government’s score to 66.7 as of the end of May 2021, marginally higher than the 66.2 rating reported in the euro area.

A month earlier, the estimate stood at 73.8, and was lowered to reflect the continued easing of restrictions, which have been progressing as scheduled.

Industrial Production

In April, growth in industrial production turned significantly positive after five consecutive negative readings, while the volume of retail trade rebounded strongly in annual terms.

Property Market

The annual rate of change in the number of commercial permits eased compared with a month earlier, while that of residential permits turned positive, the CBM observed.

As regards residential property transactions, in May the number of final deeds and promise-of-sale agreements rose sharply on an annual basis. “This strong increase reflects base effects from the declines experienced last year during the partial lockdown, as well as Government schemes intended to support the property market.”


The number of registered unemployed persons fell compared with March and compared with a year earlier, while the unemployment rate remained unchanged from a month earlier, well below the historical average.


The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) stood unchanged at 0.1 per cent in April, while that based on the Retail Price Index accelerated to 0.9 per cent. The difference between the two measures of inflation reflects technical factors related to the drop in the weight of tourism-related items included in the HICP.

Loan Moratorium

The Economic Update also includes data on recourse to the moratorium on loan repayments offered by domestic credit institutions to residents of Malta in response to COVID-19. The value of household and corporate loans subject to a moratorium at the end of April edged down further to €281.8 million, equivalent to 2.3 per cent of related outstanding loans and about one-seventh of the extent of the moratorium at its peak in July 2020.

This suggests a recovery in income flows and, for some, the expiration of the moratoria period, the CBM noted.

By the end of April 2021, 587 new facilities for working capital and loan repayment purposes had been granted to businesses impacted by the pandemic under the Malta Development Bank COVID-19 Guarantee Scheme, corresponding to total sanctioned amounts of €444.4 million, or 57.1 per cent of the scheme’s target size.


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