The Central Bank of Malta’s May Economic Update shows business activity moderating toward its long-term average, while economic sentiment weakened but remained above its historical norm. Industrial production contracted 3.6% year over year in March, retail trade growth slowed to 7.5% and tourism expenditure increased 6.9%. The labor market also showed signs of easing, with employment expectations below their historical average and unemployment unchanged at 3.5% for a third month, up from 3.1% a year earlier. Property market supply and demand remained strong, with residential permits and home sales agreements rising year over year in April. Harmonised Index of Consumer Prices inflation increased to 2.5%, 0.5 percentage points below the euro-area rate, although inflation excluding energy and food was higher in Malta at 2.4%. The Consolidated Fund recorded a March deficit of EUR 313.9 million, compared with EUR 145.4 million a year earlier, reflecting higher expenditure and lower revenue. Resident deposit growth accelerated to 7.5%, while credit growth remained at 7.8%, supported by lending outside general government.
Central Bank of Malta2026-05-28
Central Bank of Malta reports moderating economic activity as inflation rises to 2.5%
The Central Bank of Malta reported that business activity moderated toward its long-term average, while inflation rose to 2.5% and unemployment remained at 3.5%. Property demand stayed strong, but industrial production contracted and economic sentiment weakened. Resident deposits grew 7.5%, credit expanded 7.8% and the March fiscal deficit widened to EUR 313.9 million.