Economic update 6/2018

Abstract

In May, the Bank’s Business Conditions Index (BCI) eased slightly on a month earlier, while continuing to suggest above-average conditions. Economic sentiment rose across all sectors, except among consumers, although the latter remained high from a historical perspective. In April, tourism activity grew at a strong pace in annual terms, while industrial production and 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) edged up slightly to 1.4% in April. While the annual rate of change of Maltese residents’ deposits decelerated to 4.6%, annual growth in credit to residents accelerated to 1.4%. As regards fiscal developments, the cash-based Consolidated Fund recorded a deficit compared with a surplus in April 2017.