Malta registers highest GDP growth in eurozone in first three months of 2019

Malta’s GDP increased by 4.8% during the first three months of 2019 compared to the same period the previous year, a report shows.

The macro update report published by global credit rating agency DBRS on Monday indicates that the growth in Maltese GDP for that period surpassed all other euro area countries.

The top growth performers for the first quarter of 2019 were small economies - with Estonia and Lithuania registering the second and third highest GDP increases after Malta, at 4.6% and 3.8% respectively.

On the other hand, the three largest eurozone economies - Italy, Germany and France - underperformed, achieving year-on-year growth rates of -0.1%, 0.7% and 1.2% respectively.

Real GDP in the euro area grew by 0.4% in 2019, the report says, up from 0.2% in the previous quarter. Compared with the same quarter in 2018, GDP rose by 1.2%.

DBRS noted that external uncertainties over an escalation in protectionism and a no-deal Brexit continued to weigh on the euro area’s manufacturing sector, with Germany projected 2019 growth having recently been revised downwards to 0.5%, as weak external demand is affecting German exports and industry.

The eurozone’s economic sentiment was also influenced by the external uncertainties, with a deterioration having been registered here even in strong growth performers like Spain, which managed a 2.4% year-on-year growth for Q1 2019.

While economic sentiment in the euro area might be bottoming out, the report said that weakness in global trade is expected to be more persistent.

In June, the European Central Bank (ECB) revised up its economic growth projection for the EU19 to 1.2%, up only 0.1% from its March 2019 projecting but reflecting a better-than-expected Q1 result.

Malta’s unemployment rate third-lowest

At 3.5%, Malta had the third-lowest unemployment rate in the EU19 in April 2019, the report shows. Germany, with 3.2%, and the Netherlands, with 3.3%, had the lowest and second-lowest rates respectively.

The euro area seasonally adjusted unemployment rate was 7.6% in April 2019, down from 8.4% a year ago. This is the lowest rate recorded in the Euro area since August 2008.

1.7% inflation rate for Malta in April 2019

The euro area inflation rate in May 2019 stood at 1.2%, down from 1.7% in April. For Malta, the April inflation rate also stood at 1.7%, same as the eurozone average.

The highest contribution to the inflation rate in the monetary union came from energy, followed by food, alcohol and tobacco services, and non-energy industrial goods.

Core inflation - excluding food and energy items – fell to 1.2% in May from 1.4% in April 2019. The average inflation rate for the first five months of 2019 was 1.4% compared to 1.8% in 2018 as a whole.