Economic update 12/2017

Abstract

The Bank’s Business Conditions Index (BCI) signalled an improvement in activity levels during November. Economic sentiment rose during the month, with improved confidence in the retail and industry sectors, and among consumers, offsetting weaker confidence within the construction and services sectors, albeit still at a very high level. In October, retail sales and tourism activity grew at a slower pace in annual terms. On the other hand, industrial production declined 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 edging down further from low levels. Price pressures picked up in October, with the annual rate of inflation based on the Harmonised Index of Consumer Prices (HICP) rising to 1.5%. Maltese residents’ deposits rose by 15.7% when compared with a year earlier, while growth in credit to residents rose marginally to 2.7%. As regards fiscal developments, the cash-based Consolidated Fund registered a small surplus in the first ten months of 2017.