Inflation was down slightly in February, with the economic services minister hailing what he claimed was the success of the government's food prices initiative, which came into force on February 1.

The National Statistics Office said the annual rate of inflation as measured by the Harmonised Index of Consumer Prices was 3% - down from 3.7% in January.

It said the highest annual inflation rates last month were recorded in food and non-alcoholic beverages (6.8%) and education (5.6%). 

But Economic Services Minister Silvio Schembri in a Facebook post pointed to a chart issued with the NSO's statement, showing that the monthly rate of inflation for food and alcoholic beverages was down 1.1%.

Schembri said the data did not mean that the government had achieved all its aims, but it meant that work was paying off. The government, he said, was determined to continue its battle against inflation.   

The food prices initiative saw the prices of up to 400 basic food items reduced by 15% from February 1 in a deal negotiated between the government, importers and major retailers to bring down inflation.

The Fitch rating agency reported on Saturday that there were indications that the “novel” government initiative to slash the prices of various basic food prices by 15% had a positive impact, with HICP food index inflation dropping in February. It said it expects food and service prices in Malta to gradually normalise and described Malta’s inflation rate, which hit 5.6% in 2023, as broadly in line with that of similar-rated peers.

On Friday, the Food and Agriculture Organization said world food prices dropped for the seventh month in a row February as falling cereal prices outweighed more costly sugar and meat.

Inflation rates

The NSO said on Monday that throughout February, the largest upward impact on annual inflation was registered in the food and non-alcoholic beverages index (+1.22 percentage points), largely due to higher milk prices.

The second and third largest impacts were measured in the restaurants and hotels index (+0.61 percentage points) and the housing, water, electricity, gas and other fuels index (+0.41 percentage points), mainly on account of higher prices of restaurant services and rents.

The downward impacts on annual inflation were registered in the communication Index (-0.39 percentage points) and the recreation and culture index (-0.09 percentage points), mainly reflecting lower prices of mobile phone services and package holidays.