Inflation edges up to 1.5% in August 2024

Malta’s inflation rate increased by 0.1 per cent in August, after increasing by the same amount in July.

Inflation, as measured by the Retail Price Index (RPI), now stands at 1.5 per cent, a far cry from the four and seven per cent point increases reported in the August 2023 and 2022, respectively, and well below the target of two percent, over the medium term, set by the European Central Bank.

The highest annual inflation rates in August 2024 were registered in other goods and services (4.7 per cent) and personal care and health (3.6 per cent).

In the other goods and services category, jewellery, watches and other articles registered an annual inflation rate of 7.7 per cent, non-durable household goods registered an annual rate of 6.2 per cent, veterinary services (including pet food) and domestic services registered an annual rate of 0.9 per cent and insurances, financial services and other services registered an annual rate of 4.7 per cent.

On the other hand, the lowest annual inflation rates were registered in water, electricity, gas and fuels (0.0 per cent) and clothing and footwear (0.2 per cent).

In August 2024, the largest upward contribution to the overall annual inflation was registered in the food index (+0.46 percentage points), largely due to higher prices of restaurant services. The second and third largest contributions were measured in the other goods and services index (+0.34 percentage points) and the personal care and health index (+0.32 percentage points), mainly on account of higher prices of insurances and articles of personal hygiene, respectively.

When looking at the month-on-month price increases, sports-related equipment rose by 0.6 per cent, while beverages increased in price by 0.4 per cent.

There were notable month-on-month price drops in a number of categories, notably in footwear (-7.2 per cent) and clothing (-4.7 per cent).

Meanwhile, although jewellery and watches were among the main drivers of inflation over the last year, that trend now seems to be reversing, with such articles registering a 2.7 per cent decrease in price.