Survey Notes Sharp Rebound In Maltese Business Confidence

by Robert Lee, Tax-News.com, London

08 August 2003

In its quarterly review of the economic climate, the Central Bank of Malta has observed a notable rebound in business confidence in the second quarter of the year, following the general election and the official end of hostilities in Iraq.

The Business Perceptions Survey was conducted during April and May, and the results found a marked contrast between the first quarter business performance, which was fairly flat, and a sharp rebound in sentiment following April's election - which in fact represented the largest increase in optimism ever recorded by the survey.

"This surge in optimism probably reflected relief that many elements that had contributed to increase uncertainty during the first months of the year had dissipated fairly quickly," the report accompanying the survey results concluded.

The Central Bank also noted a similar upsurge in business confidence immediately after the 1998 elections, in a phenonema seemingly peculiar to the island.

The sectors of the economy where optimism seems particularly healthy at present are real estate, distribution and construction. A strong rebound in the financial services sector and industrial firms was also noted in the survey results.

Optimism seems to be weaker amongst firms whose demand is predominately domestic, which contrasts with a sharp pick-up in confidence amongst externally-orientated firms, particularly amongst manufacturing businesses in the machine and equipment sub-sector. Tourism has also seen a boost in sentiment, according to the Central Bank.

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