Central Bank of Malta

The Central Bank of Malta has issued its latest economic update, where it states that in July, economic confidence rose when compared to June, continuing to be above the long-term average.

The change was most noticeable in retail, driven by a strong amelioration in retailers’ expectations of business activity over the next three months, and by their assessment of sales in recent months.

In industry, confidence also markedly increased with companies reporting “strongly positive” production expectations for the months ahead while the number of respondents reporting having less work than normal dropped.

Meanwhile, annual growth in business activity remained broadly unchanged when compared to the previous month, also remaining above its long-term average.

In July, price expectations stood below their year-ago level in the retail sector, and to a lesser degree, in industry. By contrast, price expectations in services and construction were significantly above the July 2022 level. Price expectations among consumers also edged up compared with a year earlier, albeit to a lesser extent.

In June, industrial production contracted on a year earlier, after growing strongly in May. Retail trade grew at a faster pace.

The unemployment rate declined to a historic low of 2.6 per cent in June, from 2.7 per cent in the previous month, and three per cent in June 2022.

While activity indicators were mixed, those for the labour market were very positive.

Maltese residents’ deposits expanded at an annual rate of one per cent in June, following an increase of 0.9 per cent in the previous month, while annual growth in credit to Maltese residents reached 3.9 per cent, from 3.7 per cent a month earlier.

Residential building permits declined slightly in June compared with month-ago levels but were higher in annual terms. In July, the number of promise-of-sale agreements rose on a year-on-year basis, while the number of final deeds of sales fell.

The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) and the Retail Price Index (RPI) declined further in July, to stand at 5.6 per cent and 4.7 per cent, respectively.

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