Inflation continues downward trend

Malta’s inflation rate is now solidly back to more normal levels as April 2024 saw annual inflation of 1.6 per cent, down from 1.9 per cent in March.

This is now well below the two per cent target rate set by the Eurosystem, the network of Eurozone central banks, though that is not itself an issue: The European Central Bank’s Governing Council had in 2021 redefined the target as two per cent over the medium term, allowing more leeway for fluctuations on either side of the target.

In April 2024, the largest upward contribution on the overall annual inflation was registered in the food index (+0.96 percentage points), largely due to higher prices of take-aways, according to the National Statistics Office.

The second and third largest contributions were measured in the other goods and services index (+0.46 percentage points) and the personal care and health index (+0.33 percentage points), mainly on account of higher prices of cleaning products and articles of personal hygiene, respectively.

The downward contributions on the overall annual inflation were registered in the transport and communication index (-0.75 percentage points) and the clothing and footwear Index (-0.01 percentage points), mainly reflecting lower prices of mobile phone services and garments, respectively.

In April 2024, the other goods and services index registered the highest annual inflation rate at 6.3 per cent, of which jewellery, watches and other articles registered an annual rate of 8.7 per cent, non-durable household goods registered an annual rate of 9.8 per cent, veterinary services (including pet food) and domestic services registered an annual rate of 1.3 per cent and insurances, financial services and other services registered an annual rate of 6.1 per cent.

The transport and communication index registered the lowest annual inflation rate of -3.4 per cent, of which transport registered an annual rate of -2.0 per cent and communication registered an annual rate of -8.1 per cent.