October Business Conditions Index dips, suggesting ‘slightly below-average conditions’

In October, the Central Bank of Malta’s Business Conditions’ Index (BCI) fell when compared with the previous month, and started to suggest slightly below-average conditions.

The Bank reported this week in its Economic Update how, conversely, economic sentiment edged up and remained above its longterm average. Higher confidence in the services and construction sectors, and to a lesser extent in industry, offset lower sentiment in the retail sector and among consumers.

In September, the number of tourist arrivals rose on a year earlier, albeit at a slower pace when compared with August. Similarly, industrial production increased at a slower rate. The volume of retail trade grew at a faster annual pace compared with a month earlier.

Conditions in the labour market continued to be favourable, with the number of registered unemployed and the unemployment rate remaining low from a historical perspective.

The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) eased to 1.6% in September. The rate based on the Retail Price Index (RPI), which is the more relevant measure of consumer price inflation for domestic households, also moderated to 1.4%.

Maltese residents’ deposits grew at a faster annual rate of 5.6% in the year to September, while credit to Maltese residents rose by 6.2% over this period.

The cash-based Consolidated Fund recorded a deficit compared with a surplus a year earlier.