The Central Bank’s Business Conditions Index indicates that in January, annual growth in business activity fell marginally below its long-term average. 

According to February's economic update, the European Commission’s economic confidence indicator fell in January, and stood below its long-term average. Employment expectations also decreased when compared with a month earlier. 

In the productive sectors, price expectations rose among retailers and in the construction sector, but fell strongly in the services sector and in industry.

Developments in activity indicators were mixed, as industrial production rose at a faster pace on a year earlier, while retail trade contracted in annual terms. Labour market conditions remained favourable in December.

Residential permits were lower but commercial permits were higher in December compared with their year-ago level. In January, the number of promise-of-sale agreements rose on a year-on-year basis, while the number of final deeds was broadly unchanged. 

In December, Maltese residents’ deposits, forming part of the broad monetary aggregate M3, rose above their year-ago level, following four consecutive year-on-year declines.

This increase was mostly driven by balances belonging to households. Meanwhile, annual growth in credit to Maltese residents increased at a faster pace compared with a month earlier. 

In January, the annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) stood at 3.7%, unchanged from a month earlier. However, inflation according to the Retail Price Index (RPI) declined to 3.2% from 3.6% in December.

Graphic prepared by the Central Bank of Malta.