Economic update 3/2018

Abstract

In February, the Bank’s Business Conditions Index (BCI) was unchanged on a month earlier, and continued to suggest above-average conditions. Economic sentiment edged up, reflecting gains across all sectors except services. In January, retail sales and tourism activity grew in annual terms, while industrial production contracted slightly. Labour market conditions remained favourable, with the number of registered unemployed declining on an annual basis and Eurostat’s measure of the unemployment rate falling further to a new record low. The annual rate of inflation based on the Harmonised Index of Consumer Prices (HICP) eased to 1.2% in January. Meanwhile, the annual rate of change of Maltese residents’ deposits rose to 7.9%, while credit to residents increased by 1.7%. As regards fiscal developments, in the first month of the year, the cash-based Consolidated Fund showed a narrower deficit compared with January 2017.