Inflation shot up to 2.4 per cent in November but was well below the EU area average of 4.9 per cent registered that month, new data released on Friday showed. 

Calculations based on the EU-wide Harmonised Index of Consumer Prices showed that the inflation rate in Malta rose by one percentage point from October when the HICP inflation rate stood at 1.4 per cent. 

The 2.4 per cent rate is the highest rate registered since the annual HICP rate hit 2.5 per cent in September 2018. 

But despite the significant one-month increase, Malta currently has the lowest annual inflation rate across the entire EU.

When compared to eurozone countries, Malta registered a rate 2.7 percentage points lower. Lithuania (9.3 per cent), Estonia (8.6 per cent) and Hungary (7.5 per cent) registered the EU’s highest rates. 

The EU is facing a reversal of the historically low inflation rates registered over the past years. In November 2020, the annual HICP rate across the EU was 0.2 per cent, with the eurozone registering a deflationary rate of -0.3 per cent back then. Those figures now stand at 5.2 per cent and 4.9 per cent respectively. 

Malta’s relatively low inflation rate can in large part be attributed to its fixed energy and gas prices. Prices for those commodities have spiked across the continent and have added significant inflationary pressures to EU member state economies. 

The energy component of the HICP registered a 2.57 percentage point increase in November across the EU. 

How Malta compares to the Eurozone when energy and unprocessed foods are removed from HICP calculations. Image: NSO

But even when energy and unprocessed foods are excluded from euro-area inflation calculations, Malta’s annual rate of inflation remains 0.9 percentage points lower than that experienced by other eurozone countries.  

In Malta, the most significant inflationary pressure that month came from the rising cost of food and non-alcoholic beverages, with that component of the HICP rising by 1.2 per cent over October. That index has contributed 0.74 percentage points to national inflation so far this year, with the National Statistics Office attributing the rise in large part to higher prices of vegetables. 

Conversely, November saw a -2.2 per cent drop in the communication index over November 2020, in large part due to the declining cost of mobile phone services. 

The HICP is used to compare inflation rates across the EU. It has been used by the European Central Bank as the measure of price stability across the euro area since January 1999.