Government finances reach surplus of €142.3 million, marking significant turnaround

Between January and September, the Government recorded a €142.3 million surplus, a significant improvement from the €47.8 million deficit during the same period last year.

In September alone, the Consolidated Fund (the Government’s main bank account) surplus stood at €43.6 million, €1.3 million higher than the same month last year, driven by a slight rise in revenue exceeding expenditure growth.

These figures were brought to light in the Central Bank of Malta’s November Economic Update.

The Econmic Update also found that business activity showed a slight improvement in October compared to September, with the Bank’s Business Conditions Index (BCI) registering figures close to its long-term historical average.

Economic sentiment also rose, as reflected in the European Commission’s Economic Sentiment Indicator (ESI). The indicator climbed to 102.8 in October, exceeding its long-term average of 100.0. Month-on-month, sentiment improved in industry, services, and retail, with the biggest gains in industry and services, while other sectors saw declines.

Inflationary pressures slightly intensified in October, with the Harmonised Index of Consumer Prices (HICP) rising to 2.4 per cent from 2.1 per cent in September. This figure exceeds the euro area average by 0.4 percentage points. The increase was primarily driven by unprocessed food prices and transport costs.

Nonetheless, HICP inflation (excluding food and energy) remains moderate at 2.2 per cent, well below the euro area average of 2.7 per cent.

Industrial production and retail trade saw year-on-year growth in September, with the manufacturing sector leading the way through increased output in pharmaceuticals, machinery, and textiles.

However, uncertainty remains a key challenge, particularly in the retail and industrial sectors, as reflected in the European Commission’s Economic Uncertainty Indicator (EUI), which rose to its highest level in recent months.

The property market displayed mixed dynamics in October. While residential building permits rose annually, commercial building permits declined compared to the same month in 2023. Meanwhile, the number of promise-of-sale agreements for residential properties surged, reflecting continued demand in the housing sector, as final deeds of sale fell slightly.