While around Euope the talk is about how long the current recession could last, here in Malta the economy continues to progress. This is confirmed by the Central Bank of Malta in its latest Economic Update. The Bank notes that its Business Conditions Index indicates that, in December, annual growth in business activity remained above its long-term average. In fact, the index appears to have improved compared to the previous month.
The Business Conditions Index is a complex indicator compiled by the economists of the Central Bank utilising trends and information from a wide range of economic variables. These together show that the economy is growing more than its long-term average.
The Central Bank’s publication also outlines that the European Commission’s economic sentiment indicator rose in December and was above its long-term average. More importantly, firms’ employment expectations also increased greatly when compared with a month earlier. This is a testimony to the resilience of the Maltese economy.
Interestingly, the report notes that, compared with the average for 2022, price expectations in 2023 declined significantly in retail and in industry but rose strongly in the construction sector. This means that inflationary pressures are waning. Official inflation rates confirm that inflation is, in fact, moderating.
The Bank’s experts observe that industrial production rose, as did retail trade. Labour market conditions remained favourable in November, with net engagments and record low unemployment.
In December, the number of promise of sale agreements and the number of final deeds rose on a year on year basis. At the same time, household deposits continued to improve.