Economic update 9/2016

Abstract

Overall economic sentiment improved in September, driven by a more favourable assessment by all sectors except construction. Hard data show that industrial production fell again in annual terms in July. In contrast, activity in the tourism sector expanded in both July and August. Retail sales increased in August, following a drop in July. The labour market continued to perform solidly, with the annual growth rate of the gainfully occupied population at 4.3% in April. Meanwhile, unemployment fell further. Price pressures remained moderate. The annual rate of inflation based on the Harmonised Index of Consumer Prices (HICP) and the Retail Price Index (RPI) both edged up in August, to 1.0% and 0.8%, respectively, while industrial producer prices increased marginally. Maltese residents’ deposits continued to expand rapidly in August, while the annual rate of growth of credit to residents eased. As regards fiscal developments, the deficit on the cashbased Consolidated Fund narrowed in the first eight months of the year, due to an increase in tax revenue.