The rate of inflation went up to seven per cent in August, up 0.2 percentage points over the previous month, with food and drinks being behind the largest increase. 

In its monthly review, the National Statistics Office (NSO) said the rate went up from 6.8 per cent in July to seven per cent in August with the 12-month moving average rate for at 4.3 per cent.

The Harmonised Index of Consumer Prices (HICP) measures monthly price changes in the cost of purchasing a representative basket of consumer goods and services. It is calculated according to rules specified in a series of EU regulations.

According to the latest inflation figures for August, the highest rates in August were recorded in food and non-alcoholic beverages (11.3 per cent) and housing, water, electricity, gas and other fuels (9.2 per cent).

The lowest annual inflation rates were registered in clothing and footwear (0.4 per cent) and communication (0.9 per cent).

Drawing comparisons with the rest of Europe, the NSO said that the latest EU data showed that in July, Malta's inflation was 2.1 percentage points lower than the 8.9 per cent registered for the euro area.

Inflation rates since 2020. Photo: NSO

The persistent increases in inflation will likely mean that Malta's statutory cost-of-living wage increase (COLA), announced annually in the budget, will be around €10 weekly. The figure is based on the prices of a pre-determined basket of products agreed years ago between the government, employers and trade unions.

COLA was just €1.75 in the last budget.

Earlier on Friday, Finance Minister Clyde Caruana vowed to continue subsidising energy and food prices.

Caruana also said the government will spend around €608 million in subsidising energy and food prices in 2023, an increase of €135 million on this year’s spend.

Correction September 16, 2022: A previous version misstated the amount of the monthly increase in inflation.