Business activity in Malta remained broadly stable in November, holding close to its long-term average, according to the Central Bank of Malta’s December Economic Update. While several indicators point to moderation across parts of the economy, overall conditions suggest resilience rather than contraction.

The Bank’s Business Conditions Index showed little change from October, indicating that annual growth in business activity remains in line with historical norms. Meanwhile, the Economic Policy Uncertainty Index declined during the month, reflecting a slightly calmer policy environment, though uncertainty levels remain above their long-term average.

Sentiment indicators softened marginally. Both the European Commission’s Economic Sentiment Indicator and the Employment Expectations Indicator fell compared to October, although they continued to sit above their historical averages, signalling that confidence remains relatively strong despite recent easing.

Recent data highlights uneven performance across sectors. Industrial production contracted in October, while retail trade growth remained unchanged on an annual basis. Services production also declined in September, extending a downward trend that has been in place since February 2025. These developments point to cooling momentum in some of Malta’s key economic drivers.

Labour market conditions remain tight. The unemployment rate edged up slightly on a month-on-month basis but stood at just 3.1%, a level that remains low by historical standards and suggests continued strength in employment.

The property market showed renewed activity. In October, permits for residential buildings increased compared to the same period last year. This momentum continued into November, with both promise-of-sale agreements and final deeds of sale rising on an annual basis, indicating sustained demand in the housing sector.

Financial conditions showed signs of moderation. In October, growth in deposits and credit held by Maltese residents slowed compared to the previous month, suggesting more cautious behaviour among households and businesses.

Inflation remained unchanged in November. The Harmonised Index of Consumer Prices stood at 2.5%, the same level recorded in October, with inflation excluding food and energy also at 2.5%. Both measures continue to exceed the euro area average. Meanwhile, inflation measured by the Retail Price Index eased slightly to 2.6%, down from 2.7% the previous month.

On the fiscal front, the Consolidated Fund recorded a higher deficit in October compared to a year earlier, as a sharp increase in government expenditure outweighed higher revenue intake.