Economic sentiment in Malta edged down in July

The bank’s Business Conditions Index for July indicates that annual growth in business activity is at its long-term average estimated since January 2000.

The European Commission’s Confidence Survey shows that economic sentiment in Malta edged down in July when compared with a month earlier, but stood at its long-term average, which is estimated since November 2002. When compared with June, sentiment deteriorated in all sectors covered by the survey, except in the retail sector.

Additional survey information shows that compared to June, price expectations fell in the services sector and among consumers, but rose in the remaining sectors.

The European Commission’s Uncertainty Indicator for Malta decreased when compared with June, signalling lower uncertainty. This was driven by developments in services and industry, as uncertainty rose among consumers, and to a smaller extent, in the retail sector.

In June, industrial production contracted in annual terms, though at a smaller rate compared with May. Meanwhile, the volume of retail trade rose at a slower pace than in the previous month.

The unemployment rate fell marginally to 3%, when compared with May and also stood below last year’s rate. The rate observed in June was, in fact, the lowest ever recorded.

Residential permits rose in June relative to their year-ago levels, while commercial permits declined. In July, both the number of promise-of-sale agreements and final deeds of sale fell on a yearon-year basis.

The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) stood at 6.8% in July, up from 6.1% in the previous month. Inflation based on the Retail Price Index (RPI) also rose, reaching 6.8% in July from 6.2% a month earlier.

In June, the deficit on the Consolidated

Fund narrowed substantially when compared with a year earlier as government revenue rose while government expenditure decreased.

Annual growth in residents’ deposits remained strong in June, rising by 9.8%. Meanwhile annual growth in credit to Maltese residents rose marginally to 7%. By the end of the month, 622 facilities were approved and still outstanding in terms of the Malta Development Bank (MDB) Covid19 Guarantee Scheme, corresponding to total sanctioned amounts of €482.6m. By June, three loan facilities were approved under a new MDB Subsidised Loans Scheme aimed at importers and wholesalers of wheat and animal feeds, covering total sanctioned lending of 482.6m.

In June, the MDB launched the Liquidity Support Guaranteed Scheme (LSGS) to provide additional liquidity support in response to the Ukraine crisis. This scheme consists of two measures: LSGS-A provides bank financing support to all undertakings affected by the crisis, while LSGS-B is specific to fuel and oil importers. No facilities were approved by June.