Stabbiltà programme boosts consumer confidence

According to a European Commission survey, the feeling among families in Malta is better than the historical average.

The Stabbiltà programme, through which more than 400 products have declined in price and will remain stable until at least the next Budget Day, has had a positive impact among Maltese and Gozitan families. This emerges from the monthly survey carried out by the European Commission to scientifically measure economic sentiment across the Union.

There is at present a very negative feeling among households across Europe, as they are being severely affected by energy price shocks as well as an increase in interest on loans. There is compounded by a strong inflation and a lack of economic growth.

In contrast, in Malta the feeling among families is better than the historical average. By the European Commission’s measure, the economic sentiment among Maltese and Gozitan consumers is the best since May 2022. The Commission’s survey indicates that, in February, families in Malta, in contrast to those overseas, were anticipating that their financial situation will improve in the coming months. The number of those expecting an increase in prices has fallen sharply compared to previous months. This indicates that the Stabilità programme had a very positive impact on families’ expectations in February.

Positive sentiment among consumers is also reflected in the sentiment among retailers, which is also above the historical average. A majority of Maltese outlets reported increasing sales, and there are predictions that sales will increase further in the coming months. This confirms that the Stabbiltà programme is reaching its objective of reducing prices but not store revenues, as lower prices are compensated by higher turnover.

Meanwhile, the Commission’s survey conducted in February also looks at businesses across various sectors.

Operators in the construction sector had a better sentiment than in previous months and than the historical average. Although there has been some slight decline in activity in past months, there is an expectation that orders will increase. At the same time, contractors reported having orders to guarantee almost 6 months of production.

In services, a majority of firms in Malta claimed to have seen a sharp increase in activity in recent months and that they believe that this will continue to grow, with a majority of more than a quarter of businesses expressing this sentiment. Expectations among operators in the sector were positive and compare well with the historical average. One in five operators said they will be hiring more employees.

In industry after months of expansion, production fell slightly in January. At the same time more than half of surveyed firms said they think that orders will be reduced. This reflects the negative international situation. That said, factories already have orders that will take an average of five months to carry out. This is in line with the historical average in Malta and well above the European average.

Photo: Gustavo Fring

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