Malta Insights

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JUNE RECORDS DROP IN INDUSTRIAL PRICES

A decrease in intermediate goods pushed down the Industrial Producer Price Index for June by 0.27 percent from the same month last year. Data bytheNationalStatisticsOfficeshowsasharpdropof2.41percentinthe flow of intermediate goods, the only industrial grouping to register a decrease.

Prices rose by 1.98 percent in consumer goods and by 1.19 percent in capital goods, while they remained stable in the energy sector. The Industrial Producer Price Index was coming from a four-month rise and is the second time it decreased this year since February. Compared with the previous month, indices fell by 0.06 percent, brought down by decreases in capital goods (-0.14%), consumer goods (-0.08%) and intermediate good (-0.03%).

Prices in the domestic market increased by 1.46 percent year-on-year and by 0.02 percent month-on-month. Non-domestic prices, by contrast, recorded drops of 1.35 percent from June 2019 and 0.11 percent from May 2020.

REGISTERED UNEMPLOYMENT SLIGHTLY DOWN FROM MAY

The number of persons registering for work in June stood at 4,270: an increase of more than 2.650 compared with the same month last year but a decrease of 139 from May 2020. Figures published by the National Statistics Office showthat those who have been seeking workfor less than 21 weeks decreased by 194 month-on-month whereas registered unemployed in the 21 to 52 band increased by 69.

The unemployment register saw a decline across all age brackets from May to June, except for people aged 45 and over. There were 1,595 people in this category by the end of the sixth month, up from 1,583 in May. The biggest drop was observed in the 20 to 24 age group, which decreased by a tenth over the month.

Women make two in every five people on the register, totalling 1,689 from 1,750 in May. The number of men also fell from 2,659 to 2,581 in June.

All occupation categories recorded a decrease in job seekers, with the number of Clerical Support Workers looking for work shrinking by 52 percent compared with May – the biggest drop. Demand for this job type, however, remains the highest among all sectors, with 533 requests on the register.

Thesmallestdemand isobserved in theSkilled Agricultural and Fishery Work category, sought after by 55 unemployed people.

GOVERNMENT DEFICIT RISES TO 8.5 PERCENT IN FIRST QUARTER

Malta registered a general government deficit-to-GDP ratio of 8.5 percent in the first quarter of 2020. Figures by Eurostat indicate that Malta recorded the biggest change from the previous quarter, dropping by more than nine percent. The average ratio stood at 2.2 percent in the euro area and 2.3 percent in the EU.

All countries registered a deficit in the first three months of the year exceptforLuxembourg,theNetherlands,andGermanywhichregistered a surplus of 0.1 percent, 0.8 percent, and 1.0 percent, respectively.

This was the first time in the two years under review that Malta recorded a general government deficit, registering the highest surplus of 3.2 percent in the second quarter of 2018.

All countries registered a deficit in the first three months of the year except for Luxembourg, the Netherlands, and Germany which registered a surplus of 0.1 percent, 0.8 percent, and 1.0 percent, respectively.

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DEBT TO GDP RATIO REACHES 44% IN THE FIRST QUARTER

Governmentdebtroseto1.6percentofGrossDomesticProductin the first quarter of 2020, up from 1.5 percent in the previous quarter. Data by Eurostat show that the percentage of debt matches that in the EU average but is lower than the average in the euro area (1.9%). ThegeneralgrossdebtinMaltastoodat44.4percentofGDPinthe quarter under review, up from Q4 2019 (42.9%) but down from Q1 2019 (46.1%). The EU average stood at 79.5 percent between at the end of March this year, and Malta recorded the tenth lowest debtto-GDP ratio among member states, ahead ofPoland and behind Romania.

The highest ratios of government debt to GDP were recorded in Greece (176.7%), Italy (137.6%), and Portugal (120.0%), while Estonia (8.9%), Bulgaria (20.3%) and Luxembourg (22.3%) registered the lowest ratios.

All EU27 countries except for Lithuania, Denmark, and Bulgaria saw an increasein theirdebttoGDPratiofrom thelastquarterof2019. Compared with the first quarter of 2019, only ten member states registered an increase in their debt to GDP ratio; Malta was not among them. In fact, debt-to-GDP decreased by 1.7 percent yearon-year.

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INCREASE IN ANNUAL INFLATION RATE

The annual rate of inflation in June rose 0.72 percent compared with the same month the year before. Figures by the National StatisticsOfficeshowthatinflation asmeasured bytheRetail Price Index, increased from 0.66 percent in May.

The 12-month moving average rate was 1.20 percent, the lowest rate in the first six months this year. The highest rate in 2020 was recorded in January, when it stood at 1.63 percent.

Food prices were the highest contributors to the increase in inflation in June, increasing by 0.58 percentage points. The second-highest increase was registered in Housing, rising by 0.17 points.

On the other hand, the biggest downward turn was observed in Recreation and Culture, which slid by 0.23 percentage points followed by Clothing and Footwear with a decrease of 0.12 points.

DECREASE IN LICENSED VEHICLES FOR FIRST TIME IN FOUR YEARS

The were 395,413 licensed vehicles in Malta at the end of the second quarter this year, around 2,000 less than were registered in the previous quarter. Data bythe National Statistics Office shows that this is the first time that the stock of motor vehicles did not increase quarter-on-quarter since 2017.

Nevertheless, 3,798 new vehicles were licensed between April and June, with an averageof40 everyday. Sixin ten ofnewly licensed vehicles were passenger cars while a fifth of them were motorcycles or e-bikes. Used vehicles amounted to 56 percent of the new vehicles, with the rest being brand new models.

Slightlyover three-fourthsofall licensed vehiclesin Malta are passenger cars, 14 percent are commercial vehicles while 8 percent are motorcycles or quads. Buses and minibuses make up less than one percent of all vehicles.

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