The Malta Independent 27 May 2024, Monday
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Food prices decrease for second consecutive month – Economy Ministry

Wednesday, 17 April 2024, 18:37 Last update: about 2 months ago

The price of food in Malta has decreased for a second consecutive month, the Economy Ministry said on Wednesday as it praised the government’s price-capping mechanism.

Following the publication of official EU statistics on inflation for the month of March, the Economy Ministry noted how for the second consecutive month, food prices had decreased when compared to the start of the year.

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The Ministry said in a statement that food prices are, on average, 2% less than they were at the end of January.

It added that this decrease was not due to international trends since the food price index of the EU remained at the same level as it was in January by the end of March.

As a result of a decrease in food prices in Malta, the inflation rate went down from 3.7% in January to 2.7% in March, the ministry said. Essentially, more than a fourth of the rate of inflation was eliminated within two months, it said, and furthermore, the decrease in Malta’s inflation rate was double that seen in the EU.

As a result, Malta’s inflation rate is now nearly the same as the average rate of inflation in the EU, it said. 

Following August 2023, the inflation rate of food products in the EU was below that of Malta, a divergence which became more evident from October onwards as food prices in Malta went up and those in the EU went down, the ministry explained. In January, the inflation rate of food prices was 11% whilst the EU’s was 4.8%, it said.

The ministry said that through the ‘Stabbiltà’ initiative – which capped the price of a number of essential foodstuffs – this negative trend changed and inflation of food prices began to decrease in Malta, once again, back towards the EU average. The inflation rate of food prices was almost halved in two months and went down to 6%, it said.

A clear example of this, the ministry said, is the change in the price of coffee; whilst the price of coffee has been decreasing for over a year in European countries, it was on the rise in Malta after summer and reached a rate of inflation six times higher than the European average by January. However, in February, the rate of inflation of the price of coffee went from 16% to 6% and by March it further went down to 2.8%; closer to the European average, it said. 

The ministry gave another example in frozen vegetables the price trend of which in Malta was opposite to that in Europe, so much so, that whilst prices in Malta were on the rise, in neighbouring countries the prices were moderate. But following Stabbiltà, the ministry said, Malta’s inflation rate of the price of frozen vegetables halved from 14% in January to 7% by March, also moving closer to the EU average.

 This was the same situation for the inflation rate of margarine prices, the ministry said, which, despite a drastic decrease in the EU, even going below that of Malta following July, Malta’s inflation rate went in the opposite direction and increased. But after Stabbiltà’s introduction, the rate of inflation of margarine decreased from 9% to have a current price 6% less that of a year ago, once again getting closer the rate of EU countries, it said.

The ministry said that Stabbiltà also had an impact on the price of processed fish, especially tinned tuna, which also had a different trend to that of the rest of the EU. After Stabbiltà’s introduction, it said that inflation went from being over twice the European average to a price that is lower than last year’s.

Cereal products, on the other hand, followed a similar trend to that of the EU up until November, the ministry said, after which, prices increased at a different rate to that of the EU. But following Stabbiltà, inflation was halved going from 13% to less than 6% in a matter of two months, it said.

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