Economic update 11/2017

Abstract

The Bank’s Business Conditions Index (BCI) signalled a slight improvement in activity levels during October. Economic sentiment rose marginally during the month, as improved confidence in the retail and construction sectors, and among consumers was offset by weaker confidence in services and industry sectors. In September, both retail sales and tourism activity accelerated in annual terms. Industrial production also rose on a year earlier. Labour market conditions remained favourable, with the number of registered unemployed declining on an annual basis and Eurostat’s measure of the unemployment rate remaining low from a historical perspective. Price pressures remained moderate, with the annual rate of inflation based on the Harmonised Index of Consumer Prices (HICP) unchanged at 1.2% in September. Maltese residents’ deposits rose by 10.1% when compared with a year earlier, while growth in credit to residents stood at 2.6%. As regards fiscal developments, the cash-based Consolidated Fund showed a surplus in the first nine months of 2017.