Malta: Economic sentiment improves in services and construction, declines among retailers, consumers – CBM

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Confidence improved in services, construction and industry but declined in the retail sector and among consumers, the Central Bank of Malta said, quoting a survey carried out by the European Commission.

The CBM said that economic sentiment remained well above its year-ago level and also exceeded marginally its long-term average. When compared with December, confidence improved in services, construction and industry but declined in the retail sector and among consumers. The European Commission’s Uncertainty Indicator for Malta eased when compared with December. Lower uncertainty was largely driven by developments in industry and, to a lesser degree, in the construction and retail sectors.

Consumers continued to report that they are able to predict their household’s future financial situation with relative ease.

By contrast, uncertainty rose in the services sector. In December, industrial production contracted on an annual basis for the fifth consecutive month. Meanwhile, the volume of retail trade continued rising but at a slower pace than previously. The unemployment rate remained unchanged at 3.4% when compared with November – and well below its pre-pandemic level.

In January, the number of final deeds of sale for residential property rose while the number of promise-of-sale agreements fell on an annual basis.
Commercial permits increased slightly in December, relative to their year-ago levels, while residential permits fell. The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) and that based on the Retail Price Index (RPI) both rose to 2.6% from 2.4% in November.

The Bank also noted that the tourism sector registered additional gains over 2020, although tourist numbers remained below the 2019 levels. The number of inbound tourists stood at 75,738 in December, almost six times the 12,940 a year earlier. Nonetheless it was still half the 2019 level. Likewise, guest nights were more than three times those registered in December 2020, with collective accommodation registering the highest rise in absolute terms.

Total expenditure was more than four times that registered in the corresponding period of 2020 but was still only around 56% of the level registered in December 2019.

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