Malta Current Account Balance (EUR bn)

The pace of year-on-year GDP expansion moderated in Q4 2022, coming in at 4.7% from Q3’s 5.3%. A slowdown in household spending growth due to elevated inflation and downbeat sentiment, together with the notable slowing of export growth amid a less supportive global economic backdrop, was behind the deceleration. On the other hand, the expansion in fixed investment gained further steam, likely sustained by inflows of EU Next Generation funds. Data for the first quarter is mixed. In January, industrial production increased at a softer annual pace than in December. Moreover, the unemployment rate ticked up, although it remained at a historically low level. On the flip side, tourism arrivals more than doubled year on year in January, and consumer and economic sentiment strengthened in January-February. While inflation declined in January, it rebounded in February.