Economic Growth Forecast - Malta's central bank predicts real GDP growth will slow from 5.9% in 2024 to 3.9% in 2025, with further decline to 3.3% by 2027 [1] - The bank's report indicates a slight downward adjustment for 2025's GDP growth compared to previous forecasts, while projections for the following two years remain largely unchanged [1] Key Growth Drivers - Private consumption is expected to remain the main driver of GDP growth throughout the forecast period (2025-2027), despite a decline from recent peaks [1] - Investment is anticipated to continue recovering in the first two years of the forecast period [1] - Net exports are projected to contribute positively to GDP growth, primarily due to service trade, although this contribution will be significantly less than domestic demand [1] Employment and Unemployment Trends - Employment growth is expected to gradually slow, decreasing from 5.3% in 2024 to 3.0% in 2025, and further to 2.4% and 2.3% in 2026 and 2027, respectively [1] - The unemployment rate is projected to decline to 2.7% by the end of the forecast period [1] Wage Growth and Inflation - The labor market is expected to remain tight, which will be a key factor driving wage increases [2] - Wage growth is forecasted to slow from 6.3% last year to 4.4% in 2025, with further declines to 3.7% and 3.5% in 2026 and 2027, respectively [2] - The average annual inflation rate is expected to reach 2.3% in 2025, down from 2.4% last year, primarily reflecting a decrease in food and service inflation [2] - Inflation rates for 2026 and 2027 are projected to further decline to 2.1% and 2.0%, respectively, driven mainly by a decrease in service inflation [2]

Core Viewpoint - The President of the European Central Bank, Christine Lagarde, stated that wage growth should further slow down to manage inflation effectively [1] Group 1 - Lagarde emphasized the importance of controlling wage increases to prevent inflation from becoming entrenched [1] - The ECB is closely monitoring wage trends as part of its broader strategy to maintain price stability in the Eurozone [1] - The statement reflects ongoing concerns about inflationary pressures in the European economy [1]

Core Viewpoint - The European Central Bank Executive Board member Schnabel anticipates a further slowdown in wage growth [1] Group 1 - Wage growth is expected to decelerate, which may impact inflation dynamics in the Eurozone [1] - The statement reflects ongoing economic conditions and potential adjustments in monetary policy [1]

Core Insights - The UK labor market is experiencing significant contraction, with the largest drop in employment numbers in five years, indicating a slowdown in hiring and economic activity [1] - Wage growth has slowed to its lowest level in seven months, with private sector wage growth decreasing from 5.5% to 5.1%, suggesting potential easing of inflationary pressures [1] Employment Data - Employment numbers fell by 109,000 in May, marking the largest decline since May 2020, exceeding economists' expectations [1] - Job vacancies have also decreased, reflecting companies' efforts to cut costs following increased payroll taxes and minimum wage hikes implemented in April [1] Wage Growth - The overall pay growth, excluding bonuses, dropped to 5.2%, the lowest since Q3 of the previous year, compared to an expected 5.3% [1] - The slowdown in wage growth may alleviate concerns from the Bank of England regarding rising inflation driven by accelerating wage increases [1]

Core Insights - The Bank of England committee member Taylor indicated that wage negotiation data aligns with expectations, suggesting a slowdown in wage growth [1] Group 1 - Wage growth is showing signs of deceleration, which may impact inflationary pressures in the economy [1] - The alignment of wage negotiation data with expectations suggests stability in the labor market [1]

Core Viewpoint - The Federal Reserve Chairman Jerome Powell indicated that wage growth has been slowing down consistently [1] Group 1 - Wage growth has shown a persistent decline, which may impact consumer spending and overall economic growth [1]

Group 1 - The European Central Bank (ECB) anticipates a significant slowdown in wage growth this year [1] - The expected wage growth deceleration is linked to broader economic conditions and inflationary pressures [1] - This forecast may impact monetary policy decisions and economic recovery strategies in the Eurozone [1]