Business Activity Slightly Above-Average In July

The Central Bank of Malta’s latest Economic Update reveals that business activity remained moderately above its historical average in July, reflecting continued resilience in the domestic economy.

According to the Bank’s Business Conditions Index, annual growth in business activity rose slightly in June the latest available data maintaining a positive trend above the long-term norm. The findings point to a steady performance in the local economy, despite broader uncertainties.

The Bank’s Economic Policy Uncertainty Index, which tracks economic policy-related sentiment across Maltese news sources, declined further from its May level, dropping below its historical average and suggesting improved market confidence.

The European Commission’s Economic Sentiment Indicator rose significantly from 97.5 in May to 106.6 in June, indicating a marked improvement in overall confidence. Similarly, the Employment Expectations Indicator also increased month-on-month, with both measures remaining above their long-term averages.

The labour market remained stable and strong, with Malta’s unemployment rate standing at 2.7% in May—historically low by national standards.

On the financial front, deposits held by Maltese residents grew at a slightly faster pace in May, while credit issued by domestic monetary and financial institutions declined marginally.

Inflationary pressures showed signs of easing. In June, the Harmonised Index of Consumer Prices (HICP) dropped to 2.5% from 2.7% in May. Core inflation—excluding food and energy—stood at 2.4%. Both figures remain slightly above the euro area average. Meanwhile, the Retail Price Index (RPI) held steady at 2.4%.

Public finances saw a notable improvement, with the Consolidated Fund recording a surplus in May, reversing a deficit recorded a year earlier. This shift was driven by higher government revenue and reduced expenditure.

#MaltaDaily