Business News

Central Bank reports improved sentiment among consumers in June

23rd July 2020

Consolidated Fund deficit ‘widened significantly’

The Central Bank of Malta reported improved sentiment within the retail sector and among consumers in June when, it said, economic conditions could have reached their trough.

It said in its latest Economic Update that weaker confidence in services and industry was largely offset by improved sentiment in the retail sector and among consumers, with confidence in the latter returning above its historical average. Sentiment in the construction sector also edged up, though marginally.

The volume of retail trade and industrial production in the previous month, May, fell in annual terms but the rate of contraction was smaller when compared to April. Annual growth in development permits for both commercial and residential purposes remained negative, and the amount of residential permits continued to be above the historical average.

The registered unemployed and the unemployment rate edged up further, though still relatively low from a historical perspective.

Consumer prices eased again in May.

The Central Bank reported that the deficit on the cash-based Consolidated Fund widened significantly compared with a year earlier, reflecting a significant rise in Government expenditure and a large drop in revenue as a result of the impact of the COVID-19 pandemic.

It said that more than 8,800 loans, valued at €1.6 billion, were subjected to a moratorium in May. The moratorium on loan repayments was offered as part of the liquidity support measures related to COVID-19.

The Central Bank said the value of the loans subject to a moratorium represents 13.9 of total outstanding loans to Maltese residents and increased over April, when 11.3 per cent of total loans were subject to a moratorium, indicating that liquidity needs may have started to stabilise in May.

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Central Bank reports improved sentiment among consumers in June