The Central Bank of Malta released its 2024 Annual Report during a launch, held at the bank's premises in Valletta on 30 April. The event featured addresses by the Central Bank of Malta acting governor, Alexander Demarco, chief economist, Dr Aaron Grech and the deputy governor for Financial Stability, Oliver Bonello.
The 2024 Annual Report gives a comprehensive detailed analysis of the main economic, monetary, and financial developments both in Malta and globally. It also includes an account of organisational developments along with the bank's financial statements.
The acting governor gave an overview of developments in the euro area economy and its monetary policy. He said that with incoming data and successive projections for euro area inflation showing a firming of the disinflation process, the European Central Bank (ECB) began to remove some of the restrictiveness of monetary policy. It began to lower its policy rates in June and announced additional rate cuts in the second half of the year and in the first quarter of 2025. The Eurosystem balance sheet meanwhile continued to shrink, as part of the normalisation that started in 2022. During the year the ECB also announced changes to the operational framework for implementing monetary policy.
Dr Grech, said that economic growth in Malta remained well above that in the euro area, with the expansion supported equally by domestic demand and exports when accounting for the import content. Inflation moderated significantly, with the overall rate of inflation based on the Harmonised Index of Consumer Prices averaging 2.4% in 2024, and thus less than half that of 2023. Furthermore, both this measure and the measure excluding energy and food stood below their euro area counterpart by December. The bank's projections foresee a moderation in the rate of economic growth and a further moderation of inflation towards the inflation target. Nevertheless, the outlook remains uncertain with these projections surrounded by two-sided risks.
Deputy governor Bonello focused on the recent developments in the domestic banking sector, noting its stability through healthy capital levels; high liquidity buffers, improved asset quality and profitability. He also referred to the importance of macroprudential measures to strengthen banks' resilience and closed his presentation by referring to the potential extension of the existing sectoral systemic risk buffer.
The acting governor concluded with an overview of the bank's financial results. He said that the bank managed to turn around its financial performance, registering a profit for the financial year ending December 2024, amounting to €4.95 million.
The launch was attended by officials from credit institutions, stockbrokers, economists, social partners and other socio-economic operators. It also included a Q&A session for the attendees and journalists.
The 2024 Annual Report can be found on www.centralbankmalta.org/annual-reports