Economic update 1/2018

Abstract

In December, the Bank’s Business Conditions Index (BCI) was unchanged from its level a month earlier, with activity significantly above normal. Economic sentiment rose during the month to the highest level ever recorded since the survey started to be conducted for Malta. The increase in sentiment reflected improved confidence in services and construction, and among consumers, which offset weaker confidence within the industry and retail sectors. In November, retail sales and tourism activity grew at a faster pace in annual terms. Industrial production also expanded, though moderately. 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 at the lowest level on record. The annual rate of inflation based on the Harmonised Index of Consumer Prices (HICP) stabilised at 1.5% in November. Maltese residents’ deposits rose by 12.4% when compared with a year earlier, while credit to residents increased by 2.5%. As regards fiscal developments, the cash-based Consolidated Fund registered a surplus in the first eleven months of 2017.