Business conditions in June comparable to those in 2009 – CBM

In June, the Central Bank of Malta’s Business Conditions Index fell slightly when compared with the previous month, suggesting that the economic slowdown had flattened by then, though the conditions remain significantly below their long-term average and comparable to those in 2009.

The European Commission’s Economic Sentiment Indicator (ESI)  was virtually unchanged when compared with the previous month as weaker confidence in services and industry was largely offset by improved sentiment in the retail sector and among consumers, with confidence in the latter returning above its historical average. Sentiment in the construction sector also edged up, though marginally. Nonetheless, the ESI remains well below the historical average.

In May, the volume of retail trade and industrial production fell in annual terms, although the rate of contraction was smaller when compared to that in April. Annual growth in development permits for both commercial and residential purposes remained negative, though the amount of residential permits remains above the historical average.

The number of registered unemployed and the unemployment rate edged up further, but remained relatively low from a historical perspective.

Consumer prices eased again in May. The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) decelerated to 0.9%, from 1.1% in April, while inflation based on the Retail Price Index (RPI) fell to 0.7%, from 0.8% in the previous month.

The Central Bank also said that the value of household and corporate loans subject to a moratorium at the end of May was €1.6 billion, equivalent to 13.9% of related outstanding loans, a relatively small increase when compared with April, indicating that liquidity needs may have started to stabilise.