Economic update 8/2018

Abstract

In July, the Bank’s Business Conditions’ Index (BCI) rose over the previous month and continued to suggest above-average conditions. With the exception of consumers, amongst which economic confidence remained stable at a high level, economic sentiment increased, as higher confidence was recorded across all other sectors. In June, tourism activity continued to grow at a strong pace in annual terms. Industrial production increased on a year earlier, while retail trade contracted. Labour market conditions remained favourable, with the number of registered unemployed declining on an annual basis and Eurostat’s measure of the unemployment rate falling to a new record low. The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) picked up further in June, and stood at 2.0%. In June, the annual rate of change of Maltese residents’ deposits eased to 4.5%, while the annual growth in credit to residents accelerated to 3.0%. As regards fiscal developments, the cash-based Consolidated Fund registered a smaller deficit compared with that recorded in June 2017.