Economic update 12/2015

Abstract

Economic activity in Malta continued to expand robustly in the third quarter of 2015, with real gross domestic product (GDP) increasing by 5.4% on a year earlier. Growth was driven by domestic demand. Indicators for tourism point to further expansion in the fourth quarter of 2015. Buoyant economic activity is being reflected in the labour market, with employment expanding and the unemployment rate remaining at historically low levels. Price pressures were moderate. The annual rate of inflation, based on the Harmonised Index of Consumer Prices (HICP), stood at 1.3% in November. Maltese residents’ deposits continued to expand at a rapid annual rate in October, while the annual rate of growth of credit to residents stabilised at 4.8%. As regards fiscal developments, the general government deficit narrowed in the second quarter of 2015, while the deficit on the Consolidated Fund also decreased during the first ten months of the year. On the external side, the current account of the balance of payments remained in surplus in the third quarter of 2015.