Food prices fell by 1.1% last month

Malta now has an inflation rate that has come back very close to that in the rest of the European Union.

Official statistics show that food prices fell by 1.1% last February compared with what they were a month earlier. This was the first time in three years that food prices decreased, as it was precisely in February 2021 when food prices were last lower than they were a month earlier.

A crucial factor behind this decline was the Stabbiltà programme through which around 450 products decreased in price. Before this programme, food prices in Malta had been rising above the European average for months.

As a result of the fall in food prices, the harmonised index of consumer prices (HICP), Eurostat’s inflation measure, decreased by 0.6 percentage points. In addition, there were also movements in other prices that lowered inflation by another 0.1 percentage points. Thus, HICP inflation fell from 3.7% in January to 3% in February. This was the biggest fall in HICP inflation in a single month since that observed in March 2014, when the Government cut electricity and water tariffs.

So, once again, a Labour administration has directly helped families by directly reducing the burdens they face. This is while the Maltese Government remains the only administration in Europe that has kept the price of electricity and fuel stable since the pandemic.

As a result of that action, Malta now has an inflation rate that has come back very close to that in the rest of the European Union, where it stands at 2.8%. In January the gap between Malta and the European Union was triple what it was in February. Malta now has a lower inflation rate than that in 13 countries of the Union.

In February inflation was already at the level that economic experts from the Central Bank of Malta, the International Monetary Fund, and the European Commission had predicted for December 2024. These institutions are therefore very likely to revise downwards their inflation forecasts for Malta. In addition to a positive impact on domestic demand, the decline in inflation is likely to lead to a greater improvement in competitiveness and thus to increased exports and more economic growth.

Photo: Gustavo Fring

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