Malta inflation in July drops but remains higher than Euro area average

Malta's inflation rate for July decreased to 5.6% from 6.2% the previous month, data published by the National Statistics Office (NSO) shows.

The inflation rate in Malta is lower than the European Union average, but higher than the Euro zone average.

The annual inflation rate for the Euro area was 5.3% in July, which is a slight decrease from 5.5% in June. The EU's annual inflation rate stood at 6.1%, down from 6.4% in June.

Eurostat data released on Friday also indicated that Malta's inflation rate for July was slightly lower than Slovenia's (5.7%), but slightly higher than the Netherlands' (5.3%).

The highest annual inflation rates were observed in Hungary (17.5%), Slovenia, and Poland (10.3%). The lowest annual rates were reported in Belgium (1.7%), Luxembourg (2.0%), and Spain (2.1%).

When compared to June, annual inflation decreased in 19 Member States, remained unchanged in one, and increased in seven.

The Eurostat report said the most significant upward impact on the annual Euro area inflation rate in July came from services (+2.47pp), followed by food, alcohol, and tobacco (+2.2pp), non-energy industrial goods (+1.26pp), and energy (-0.6pp).

In Malta, the largest upward impact on annual inflation was seen in the food and non-alcoholic beverages Index (+1.6pp), primarily due to higher prices of bakery products.

The second and third most significant impacts were observed in the restaurants and hotels Index (+1.37pp) and the Housing, water, electricity, gas, and other fuels Index (+0.7pp). This was mainly due to higher prices of restaurant services and rents, respectively.

Downward impacts on annual inflation were registered in the Communication Index and the Clothing and footwear Index.