PwC Malta’s most recent CEO Confidence Tracker which was carried out during October, continues to provide insights on how local businesses across a number of industries are currently performing whilst also tracking forecasted business sentiment. This survey is particularly relevant in the current economic climate where CEOs are stewarding their respective businesses through challenging times, dominated by increasing interest rates, spiraling inflation, recession signals, as well as the war in Ukraine amongst others.
The trajectory emanating from this recent barometer continues to be subdued, especially in gauging business outlook for the next six months. Nonetheless, the results also suggest that the overall level of business during summer gained traction. This heightened level of business, although lower, when compared to the one reported by the same CEOs in September 2021, comes at the back of strong signals from the tourism industry following months of distress caused by the pandemic.
In the most recent NSO update, it was reported that total inbound tourists during the first 9 months of 2022 amounted to 1.7 million while the total nights spent exceeded 12.7 million. Total tourist expenditure was estimated at €1.5 billion. Total expenditure per capita stood at €896, albeit decreasing from €967 in 2021.
The level of business outlook continues to oscillate given the recent disruptions first created by the COVID-19 pandemic, followed by the war in Ukraine and presently, the rising inflation and interest rates. The contained business outlook reported in this barometer is likely influenced by the price pressures which continued to build during the quarter.
The Central Bank of Malta in its latest quarterly review reports that annual inflation, as measured by the Harmonised Index of Consumer Prices, stood at 6.1% in June, above that of 4.5% recorded in March. Higher services inflation was the main driver behind the increase in inflation since March, although food and non-energy industrial goods prices also registered faster growth. Annual inflation based on the Retail Price Index - which only captures expenditure by Maltese residents - rose from 4.4% in March to 6.2% in June.
