Manufacturing, tourism indicators point to expansion in Q2 2015

Economic activity in Malta continued to expand robustly in the first quarter of 2015, with real gross domestic product (GDP) increasing by 4.0% on a year earlier, according to the August economic update by the Central Bank of Malta.

Growth was driven by net exports, as domestic demand declined.

The Central Bank said that indicators for manufacturing and tourism point to further expansion in the second quarter of 2015.

Buoyant economic activity is being reflected in the labour market, with employment expanding and the unemployment rate remaining at historically low levels. Price pressures remain contained.

The annual rate of inflation, based on the Harmonised Index of Consumer Prices (HICP), edged up to 1.2% in July. In June, Maltese residents’ deposits expanded at a faster pace, while the annual rate of growth of credit to residents moderated.

As regards fiscal developments, the general government deficit widened in the first quarter of 2015.

However, during the first six months of the year, the deficit on the Consolidated Fund decreased compared with the same period of 2014.

On the external side, the current account of the balance of payments was in surplus in the first quarter of 2015.