Economic sentiment reaches 12-month high among Maltese businesses

Confidence surveys carried out by the European Commission show that economic sentiment in Malta rose in March when compared with a month earlier, and stood above its long-term average, reaching its highest level in 12 months.

In month-on-month terms, sentiment increased in the retail and services sectors and in industry but declined in the construction sector and among consumers.

The Central Bank of Malta’s latest Economic Update also indicates that in March, annual growth in business activity stood above its long-term average.

Additional survey information show that in March price expectations stood firmly above their year-ago level in the construction sector, and to a lower extent, among services firms. By contrast, price expectations among retailers and consumers, as well as industry, stood lower.

The European Commission’s Uncertainty Indicator for Malta increased in March, indicating higher uncertainty, mostly in the construction sector.

In February, growth in industrial production picked up. Growth in the volume of retail trade remained strong in annual terms but was slower when compared with January.

The unemployment rate stood at three per cent in February, unchanged from the rate registered in the previous month, and marginally lower than that of 3.1 per cent registered in February 2022.

Commercial building and residential permits decreased in February, relative to their year-ago levels, but exceeded those issued in January. In March, the number of promise-of-sale agreements rose on a year-on-year basis while, the number of final deeds of sale fell.

The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) stood at 7.1 per cent in March, up from seven per cent in the previous month. On the other hand, inflation based on the Retail Price Index (RPI) edged down to seven per cent, from 7.1 per cent in February.

In February, the Consolidated Fund recorded a surplus when compared with a deficit a year earlier, as government revenue rose while government expenditure declined slightly.

Annual growth in Maltese residents’ deposits expanded at a slower rate of 3.6 per cent in February. Meanwhile, annual growth in credit to Maltese residents moderated to 6.4 per cent.