Retail trade down by 8% from 2019 levels

Confidence within the retail sector fell to a new historical low of -53.6 in June, from -30.1 in the previous month, driven by retailers’ low expectations for business activity for the following three months.

An economic update issued by the Central Bank points to signs of recovery in retail trade and industrial production between May and June although the volume of both indicators declined when compared to corresponding figures in 2019.

The volume of retail trade contracted for the fourth consecutive time in June, however, at a slower pace than that recorded in May. In June retail trade declined by 8.4% from the previous year, following a fall of 12.2% in May.

In June number of persons on the unemployment register stood at 4,270 in June, down from 4,409 in May but still higher than 1,616 registered a year earlier.

The annual growth in the industrial production index, which measures economic activity in the quarrying, manufacturing and energy sectors remained negative in June for the third consecutive month.

The index fell by 3.2% in annual terms, following a sharper contraction of 7.7% in May.

Deficit increases by €133.5 million

In June, the Consolidated Fund recorded a deficit of €222.2 million, a rise of €133.5 million when compared to the deficit registered in June 2019.

This was a result of a significant rise in government expenditure, coupled with a drop in revenue. Consequently, the deficit reached €202.9 million, compared with just €71.0 million a year earlier.

These developments reflect the slowdown in economic activity due to COVID-19, and on-going government measures to mitigate the economic effects of the pandemic.

Government revenue declined by €17.9 million or 5.9% in annual terms. This decline came, as a result, lower tax revenue from indirect taxes which declined by €36.4 million mainly due to lower receipts from VAT and licences, taxes and fines.  This was partially offset by a €14.4 million increase of revenue from income tax following three months of very strong declines. This reflected the impact of tax deferrals for both self-employed and employers during the partial lockdown.

Government expenditure increased by €115.6 million, or 29.3% when compared to June 2019, driven by a rise in both recurrent and capital spending.