Easing of COVID-19 measures improves economic activity in Malta

An analysis published on Tuesday by Malta's Central Bank showed that the country's economic activity began to improve in the third quarter (Q3) of 2020, coinciding with the easing of measures that had been introduced to control the spread of COVID-19, reported Xinhua.

In its report covering Q3 of last year, the Central Bank said that although there was an improvement over the previous quarter, it still remained well below previous years.

During Q3 2020, the bank said, economic activity in Malta recovered somewhat as gross domestic product (GDP) expanded in quarter-on-quarter terms. Seasonally adjusted data shows that GDP rose by 7.4 percent during Q3 after contracting during the first two quarters of the year.

"This reflects a rebound in private consumption, which was up by over a fifth over its second quarter trough," the Central Bank said in a statement. Although economic activity levels improved, the bank said they still remained well below pre-pandemic levels.

Real GDP fell by 9.9 percent in annual terms in Q3 2020, which was a softer decline than that experienced in the second quarter, when GDP had contracted by 16.1 percent.

The fall in GDP, the bank said, was largely underpinned by a sharp drop in net exports, as domestic demand was lower. Data collected by the bank showed that the contraction was primarily driven by the services sector, which was hit hard by the pandemic.

The bank's Business Conditions Index improved marginally during the quarter under review but remained firmly below its long-term average.

The country's unemployment rate stood at 4.6 percent, slightly above the 4.4 percent registered in the second quarter and the 3.7 percent recorded a year earlier. Nonetheless, the jobless rate in Malta remained well below the eurozone average of 8.4 percent and was relatively low historically in light of the very sharp contraction in activity, the bank said.