The Central Bank of Malta issues a December Economic Update
News – 2021 News Releases
22/12/2021
The Central Bank of Malta issues a December Economic Update
The Bank’s Index of Business Conditions shows that in November annual growth in business activity slowed somewhat from recent historical highs, but remained strong from a historical perspective as economic activity continued to recover from the low levels recorded in 2020.
The European Commission’s confidence survey shows that sentiment declined in November compared to the previous month, but remained well above the level of a year ago and its long-term average. Compared to October, confidence has declined in all sectors, with the exception of the services sector. Following recent developments, and in contrast to October, the sentiment has become somewhat negative in industry and in the retail sector.
The COVID-19 Government Response Index Bank estimate – a composite indicator summarizing various containment, economic and health-related measures introduced in response to the pandemic – has remained unchanged from the levels recorded in the previous quarter and was marginally below that reported in the euro area.
In November, both the number of final deeds of sale for residential property and the number of promise-of-sale agreements increased on an annual basis. The latter were also higher than in November 2019.
In October, industrial production fell on an annual basis for the third consecutive month. Meanwhile, the volume of retail trade has increased at a slower pace, although still strong.
The number of registered unemployed decreased both compared to September and a year earlier. The unemployment rate rose marginally to 3.6% in October but remained below pre-pandemic levels.
The annual inflation rate based on the Harmonized Index of Consumer Prices (HICP) was 1.4% in October, up from 0.7% in September, while that based on the Price Index Retail Sales (RPI) rose to 2.3% from 2.2% a month earlier. The difference between the two inflation measures mainly reflects the technical factors related to the revision of the HICP weights in 2021. In November, both HICP and RPI annual inflation rates rose to 2.4%.
The EconomicUpdate also includes data on the recourse to the moratorium on the repayment of loans offered by domestic credit institutions to residents of Malta in response to COVID-19. The value of loans to households and companies subject to a moratorium reached very low levels at the end of October. At € 26.5 million, this was equivalent to only 0.2% of the related outstanding loan. This reflects a recovery in revenue streams and the expiry of the moratorium period for a number of beneficiaries. By the end of the month, 652 working capital and loan repayment facilities had been granted to businesses affected by the pandemic under the COVID-19 Guarantee Scheme of the Malta Development Bank. , corresponding to total sanctioned amounts of € 508.6 million, or 65.4% of the target size of the scheme.
The whole Economic Update is available here.