Economic update 5/2018

Abstract

In April, the Bank’s Business Conditions Index (BCI) remained broadly unchanged on a month earlier, while continuing to suggest above-average conditions. Economic sentiment fell, reflecting weaker sentiment across all sectors. In March, retail sales and tourism activity grew at a strong pace in annual terms, while industrial production contracted at a slower rate. 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 historically new low. The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) remained unchanged at 1.3% in March. While the annual rate of change of Maltese residents’ deposits decelerated to 5.7%, annual growth in credit to residents accelerated to 2.0%. As regards fiscal developments, the cash-based Consolidated Fund recorded a larger deficit compared with March 2017.