Central Bank of Malta’s Business Conditions Index remains positive
The Central Bank of Malta’s Business Conditions Index remained positive, as most macroeconomic variables continued to recover from the very low levels observed in 2020
In September, the Central Bank of Malta’s Business Conditions Index remained positive, as most macroeconomic variables continued to recover from the very low levels observed in 2020. Nevertheless, the level of aggregate economic activity remained below pre-pandemic levels.
The European Commission’s confidence survey shows that sentiment fell in September compared with a month earlier, but remains well above its year-ago level and its long-term average.
When compared with August, confidence fell in industry and to a lesser extent among consumers. Nevertheless, sentiment remained positive in all sectors.
The Bank’s estimate of the COVID-19 Government Response Index – a composite indicator that summarises various containment, economic and health-related measures introduced in response to the pandemic – remained unchanged from its level a month earlier and stood marginally above that reported in the euro area.
In August, commercial and residential permits rose on their year-ago level. Meanwhile, the number of final deeds of sale for residential property also rose on an annual basis while promise-of-sale agreements decreased. In the same month, industrial production contracted on an annual basis following four months of consecutive growth. However, the volume of retail trade rose at a faster pace.
The number of registered unemployed persons declined both when compared with July and when compared with a year earlier. The unemployment rate remained unchanged at 3.2% in August, marginally below its pre-pandemic level.
The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) stood at 0.7% in September, up from 0.4% in August, while that based on the Retail Price Index rose to 2.2% from 2.1% a month earlier. The difference between the two measures of inflation reflects technical factors related to the revision of HICP weights in 2021.
Maltese residents’ deposits expanded at an annual rate of 10.4% in August, following an increase of 11.0% in the previous month, while annual growth in credit to Maltese residents eased to 8.0%, from 8.6% a month earlier.
In August, the cash-based Consolidated Fund recorded a surplus when compared with a deficit a year earlier, reflecting an increase in government revenue, which more than offset a rise in government expenditure.
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