Growth in residents' deposits and credit both moderated in January, according to the March edition of the Economic Update, issued by the Central |Bank of Malta.

Residents’ deposits held with monetary financial institutions expanded at an annual rate of 3.9%, slightly below the 4.0% recorded a month earlier.

Deposits with a maturity of up to two years fell by 21.6% in annual terms, following a contraction of 24.7% in the year to December. This, the bank said, may reflect efforts by certain credit institutions to reduce the number of fixed term deposit accounts.

Meanwhile, credit to Maltese residents grew by 7.3% in January, after increasing by an annual 7.6% a month earlier. This deceleration was largely driven by a smaller increase in credit to residents outside general government. Annual growth in this component eased to 7.4%, from 7.8% in December.

At the same time, credit to general government also increased at a slower pace, rising by 6.9%, below the7.3% registered in the year to December.

The annual rate of change in loans to households edged down to 8.8% in January, from 9.4% in the previous month.

Growth in mortgage lending stood at 9.2%, below the 9.8% recorded in the year to December.  

Growth in consumer credit and other lending also decelerated in January, standing at 3.9%,following an increase of 4.8% a month earlier. 

The annual rate of change in loans to non-financial corporations eased to 7.6%in January, from 7.8% in the year to December. The deceleration was largely driven by slower growth in loans to the real estate, and the wholesale and retail trade sector, the bank said.

Loans to the energy sector contracted, following a small increase in December. January also saw a faster decline in loans to the sector comprising administrative and support service activities. By contrast, loans to the transportation, storage, information and communication sector increased at a faster pace, while loans to the accommodation and food service activities sector decreased at a slower pace.