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Economic sentiment in Malta remained unchanged from April to May, with expectations for prices in the retail and services sector to continue increasing. Uncertainty is also on the rise, while industrial production fell on a year-on-year basis. Unemployment also decreased slightly, so too has the number of promise of sale agreements.

This information comes to light through the Central Bank of Malta’s June Economic Update, which mainly looks at data from the last full month of the year, May 2022 in this case.

And, as can be seen, the results are a mixed bag. In the backdrop of unchanged economic sentiment and increase in uncertainty is the war in Ukraine raging on, supply chain disruptions continuing unabated, staff shortages and rising costs.

Growth and sentiment

The CBM’s business conditions index for May indicates that annual growth in business activity has returned to its long-term average.

The European Commission’s Confidence Survey shows that economic sentiment in Malta was unchanged in May when compared with a month earlier. However, it stood above its long-term average.  When compared with April, confidence improved in the services sector and among retailers. It also ameliorated slightly in construction. These developments were partly offset by weaker sentiment in industry and among consumers.

Additional survey information shows that compared to April, a higher share of respondents in retail and in the services sector expected prices to increase in the coming months. At the same time, price expectations declined in the other sectors.

The European Commission’s Uncertainty Indicator for Malta increased when compared with April, signalling higher uncertainty. This was largely driven by developments in services and industry and to a smaller degree, among consumers.

Industrial production and unemployment

In April, industrial production contracted in annual terms, following a small increase in March. Meanwhile, the volume of retail trade rose at a faster pace than in the previous month.

The unemployment rate fell marginally from the rate registered in the previous month and remained below the rate registered a year earlier.


In May, the number of promise-of-sale agreements fell on a year-on-year basis, while the number of final deeds of sale increased slightly. Both commercial and residential permits rose in April relative to their year-ago levels.


The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) stood at 5.8 per cent in May, up from 5.4 per cent in the previous month. Inflation based on the Retail Price Index (RPI) also rose, reaching 6.0 per cent in May, from 5.7 per cent a month earlier.

Government finances and banking conditions

In April 2022, the Consolidated Fund deficit narrowed compared with a year earlier as expenditure fell while revenue rose slightly.

Annual growth in residents’ deposits and credit remained strong in April, at 8.8 per cent and 7.8 per cent, respectively. By the end of the month, 639 facilities were approved and still outstanding in terms of the Malta Development Bank COVID-19 Guarantee Scheme, corresponding to total sanctioned amounts of €489.1 million.

The full Economic Update is available here.

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