Malta's industrial production increased by 5.1 per cent year-on-year in August 2026, while tourism expenditure and lending to businesses continued to grow, according to the Central Bank of Malta's latest Economic Update.

The October report highlights continued activity across several sectors of the Maltese economy, including manufacturing, tourism, construction and real estate, although broader business conditions remained below their long-term average.

Industrial production accelerated from the 4.0 per cent annual increase recorded in July, with growth supported by activity in the energy sector and several manufacturing industries.

These included machinery and equipment, chemicals and chemical products, computer, electronic and optical products, paper products, and medical and dental instruments.

However, the Central Bank noted that industrial production growth has been volatile in recent months.

Tourism expenditure increases by 14.9 per cent

Malta's tourism sector continued to perform strongly in August, with total tourist expenditure increasing by 14.9 per cent compared with the same month in 2025.

According to the Central Bank, all tourism expenditure categories registered increases during the month.

The rise was primarily driven by higher expenditure per night stayed, alongside a marginal increase in spending per tourist.

This occurred despite a decline in the average length of stay, indicating that visitors were spending more during shorter visits.

Tourism-related services also contributed positively to economic activity.

The index of services production increased by 0.4 per cent in July, with growth recorded in accommodation and food services, transportation and storage, real estate, administrative and support services, and information and communication.

These gains offset a contraction in professional, scientific and technical services.

Business lending maintains double-digit growth

Lending to non-financial corporations continued to expand at a double-digit rate, increasing by 13.7 per cent year-on-year in August.

Although this represented a slight moderation from the 14.2 per cent growth recorded in July, the figures indicate continued expansion in credit to businesses.

The Central Bank reported increased lending to companies operating in construction and real estate, as well as accommodation and food services.

Conversely, loans to businesses in the manufacturing sector declined compared with August 2025.

Overall credit to Maltese residents increased by 7.4 per cent year-on-year, compared with 7.7 per cent in July.

Household lending also maintained strong momentum, increasing by 10.1 per cent, supported by slightly faster growth in mortgage lending.

Meanwhile, residents' deposits with monetary financial institutions increased by 8.1 per cent annually, compared with 8.3 per cent in July.

Property market activity moderates

Despite continued growth in lending to construction and real estate businesses, the Central Bank observed signs of moderation in Malta's property market.

Following a period of particularly strong activity, residential development permits declined markedly in September, continuing a downward trend from the elevated levels recorded earlier in the year.

The Bank noted that residential permits have broadly returned to their average level over the past five years.

Commercial development permits increased compared with August but remained below their September 2025 levels.

Residential property transactions also slowed, with both final deeds of sale and promise-of-sale agreements declining on a monthly and annual basis.

Merchandise trade deficit narrows

Malta's merchandise trade deficit narrowed in August compared with the corresponding month last year, as exports increased while imports remained broadly unchanged.

Excluding transactions involving mineral fuels, aircraft and ships, export growth was primarily driven by machinery and mechanical appliances, electrical machinery and printed materials.

Imports excluding these categories declined, mainly reflecting lower imports of organic chemicals and pharmaceutical products.