Inflation dips further in March

The Central Bank of Malta notes another fall in the inflation rate.

In its latest monthly report on the progress of the Maltese economy, the Central Bank of Malta notes another fall in the inflation rate in March. While pointing out that the increase in the retail price index is among the lowest in the last three years, the Central Bank’s report emphasises that this is due to a reduction in recent months of food prices. Before the implementation of the Stabbiltà scheme, food prices in Malta were rising, contrary to what was happening in the rest of Europe.

The Central Bank report notes how, even with Eurostat’s measure of inflation, the Harmonised Index of Consumer Prices (HICP), which is more influenced by things consumed by tourists, inflation in Malta is decreasing . This is happening despite the fact that the prices of the tourism industry are strong because tourism is growing at a record rate. The Bank’s experts maintain that if one excludes the effect of energy and food prices, the inflation rate in Malta is 2.2%, while that of the euro zone is 2.9%.

Meanwhile the Report indicates that business conditions remained stable during March, with growth similar to the historical average. There was an improvement in economic sentiment, as measured by the European Commission. The same Commission survey indicates that the retail sector does not expect too many price increases in the coming months.

The Bank’s report draws attention to the fact that household deposits with banks continued to increase, while promise of sale agreements increased. According to the report, last January there was a net increase of almost 3,900 jobs, while in February the Government had a surplus in the Consolidated Fund which reached almost €234 million.

Photo: REUTERS/Stephane Mahe

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