Economic update 10/2015

Abstract

Economic activity in Malta continued to expand robustly in the second quarter of 2015, with real gross domestic product (GDP) increasing by 5.2% on a year earlier. Growth was driven by domestic demand. Indicators for manufacturing and tourism point to further expansion in the third 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 are mildly increasing. The annual rate of inflation, based on the Harmonised Index of Consumer Prices (HICP), edged up to 1.6% in September. Maltese residents’ deposits continued to expand at a rapid annual rate in August, while the annual rate of growth of credit to residents accelerated. As regards fiscal developments, the general government deficit narrowed in the second quarter of 2015. During the first eight months of the year, the deficit on the Consolidated Fund also decreased compared with the same period of 2014. On the external side, the current account of the balance of payments remained in surplus in the second quarter of 2015.