Economic update 1/2017

Abstract

Business conditions remained favourable, with the Bank’s Business Conditions Index (BCI) signalling above normal activity levels in December. Economic sentiment rose marginally during the month. Retail sales and tourism activity were higher in annual terms, but industrial production declined in November. Labour market conditions remained favourable, with the registered unemployment falling further during the month. Price pressures remained moderate, with the annual rate of inflation based on the Harmonised Index of Consumer Prices (HICP) at 0.8%. Maltese residents’ deposits rose at a faster rate in November, while the annual rate of growth of credit to residents eased to 2.0%. As regards fiscal developments, the deficit on the cashbased Consolidated Fund narrowed in the first eleven months of the year, mainly due to higher tax revenue.