Malta economic activity remains consistent with long-term averages

The Central Bank of Malta reported in its August economic update that the nation's economic activity remains broadly consistent with its long-term average. While the Business Conditions Index showed a modest strengthening in July, the indicator remains slightly below its historical average.

The economic landscape presents a mixed performance across sectors. Tourism continues to show strong momentum, and the property market remains robust with steady supply and demand. However, industrial production has declined on an annual basis and remains volatile. Retail and services production also experienced more moderate growth rates in recent months.

In the labor market, the unemployment rate decreased slightly to 3.5% in June. Although this is higher than the rate from the previous year, unemployment expectations suggest continued low levels over the next 12 months.

Inflation in Malta rose marginally to an annual rate of 2.1% in July based on the Harmonised Index of Consumer Prices (HICP), up from 2.0% in June. This rate remains significantly lower than the inflation levels seen across the broader euro area, largely due to lower energy inflation.