Turnaround in Leading Growth Indicators

Contrary to what the Nationalist Party is claiming, leading growth indicators are pointing towards a sustained recovery in the economy. A correct reading of leading indicator figures published by the NSO will show that there are obvious signs of economic recovery.

Leading indicators are measures of economic activity that give a preview of the economy’s future direction. Such leading indicators on the overall economy, inflation, unemployment and other measures help drive investment decisions and economic policy.




In fact, recently published leading economic indicators are showing strong signs of a post-election economic turnaround. This confirms that the pre-election economic downturn is being halted, and that the Government’s economic policy direction has placed the country on the road to recovery.

One such leading indicator for our economy is the importation of Capital or Investment Goods, which contribute significantly to the Malta’s economic growth. In fact, International Trade statistics published by NSO show that, with one exception, importation of Investment  Goods have been in decline for eight consecutive quarters – from the end of 2011 to the middle of 2013 (Figure 1).

The NSO’s figures confirm that since the middle of 2013, imports of Investment Goods are reflecting a turnaround with a strong increase of 38% in the third quarter and 77% in the last quarter of 2013. One may observe that the decline was halted by the new Government’s change in policy direction.




A second leading indicator is the credit extended to households, which includes lending for house purchases.

While the rate of increase has suffered a drastic decline from the end of 2011, where it stood at 7%, towards the middle of 2013, where it fell to 4.8%. The decline was arrested in the months following the election, and has remained stable since then (Figure 2).

With regards to retail trade, contrary to the Opposition’s attempts to claim otherwise, in December 2013 there has been an increase by 1.4% year on year. This is a positive and encouraging result when one considers that during the same period, Eurozone countries suffered a negative fall of 1.6%.

These data confirm both business and consumer confidence towards the future, as well as their readiness to invest in the Maltese economy.

The Government is determined to keep on building on these successes to ensure that the momentum being achieved by the Maltese economy is retained.



– Friday, 7th February 2014


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