Malta: Business activity receded in December, CBM report shows

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The Central Bank of Malta said on Tuesday that annual growth in business activity receded somewhat from recent highs but nevertheless remained strong from a historical perspective as economic activity continued to recover from the low levels recorded in 2020.

The European Commission’s confidence survey shows that sentiment eased in December compared with a month earlier, but remained well above its year-ago level and only marginally below its long-term average. When compared with November, confidence fell in all sectors, with the exception of the retail sector.

The CBM notes that higher uncertainty was largely driven by developments in industry, the retail and services sectors. Consumers continued to report that they are able to predict their future financial situation with relative ease but less so than in November. Uncertainty fell in the construction sector.

The Bank’s estimate of the COVID-19 Government Response Index – a composite indicator that summarises various containment, economic and health-related measures introduced in response to the pandemic – increased in December when compared with a month earlier but stood marginally below that reported in the euro area.

In November, industrial production contracted on an annual basis for the fourth consecutive month. Meanwhile, the volume of retail trade rose at a faster pace.

The unemployment rate remained unchanged at 3.5% when compared with October but remained below its pre-pandemic level.

In December, both the number of final deeds of sale for residential property and the number of promise-of-sale agreements rose strongly on an annual basis. These were also higher than in December 2019.

The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) rose to 2.4% in November from 1.4% in October, while that based on the Retail Price Index (RPI) rose to 2.4% from 2.3% a month earlier.

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