The Central Bank of Malta has issued its latest Economic Update. The publication includes the bank’s Business Conditions Index (BCI) which shows that in August 2024, annual growth in business activity was broadly unchanged from July and remained slightly below its historical average estimated since January 2000.

The European Commission confidence surveys show that sentiment in Malta increased in August, but remained below its long-term average, estimated since November 2002.

The strongest improvement was recorded in the construction sector, though the sentiment indicator in this sector remained negative. Additional data showed that in month-on-month terms, price expectations decreased across all sectors, bar among consumers.

The largest decreases were recorded in the services and retail sectors.

A snapshot of economic and business conditions (Central Bank).

In August, the European Commission’s Economic Uncertainty Indicator (EUI) for Malta increased compared with July, indicating higher uncertainty, with the largest increase recorded in industry. In July, both industrial production and retail trade contracted on a year-on-year basis. In June, services production accelerated when compared with the same month a year ago.

The unemployment rate decreased to 3.0% in July from 3.1% in June but remained unchanged from July 2023.

Commercial building permits in July were higher than a year earlier but lower when compared to a month earlier. On the other hand, residential building permits decreased on both a monthly and an annual basis. In August, the number of residential promise-of-sale agreements increased on a year earlier, while final deeds of sale fell.

The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) stood at 2.4% in August, slightly higher than 2.3% in the previous month, exceeding the euro area average by 0.2 percentage point.

HICP excluding energy and food in Malta increased to 2.3%, while remaining firmly below the euro area average.

Inflation calculated on the Retail Price Index (RPI) rose slightly to 1.5% from 1.4% in July.

In July, Maltese residents’ deposits increased above their level a year ago, driven by balances belonging to households, financial and non-financial corporations.

Credit to Maltese residents also increased in annual terms, reflecting higher lending to both the government sector and other sectors.

In July, the Consolidated Fund registered a surplus of €150.2 million, an improvement of €194.1 million when compared with the deficit registered a year earlier. This was due to a rise in government revenue, which was complemented by a decline in government expenditure.

Overall, the Consolidated Fund balance registered a €60.5 million surplus for the period from January, from a deficit of €302.4 million in the same period a year earlier.

Read the latest issue here.