Food price markups continue to top charts despite slowed inflation

The National Statistics Office confirmed that food prices remain by far the most inflated when compared to last year, despite Malta experiencing a drop in general inflation, according to a study published on Monday.

The study, which measured year-on-year inflation for August 2023 using the Retail Price Index (RPI), confirmed results found by another NSO study published earlier in September, showing food prices continue to pose a significant problem for consumers.

The data published by the NSO found that while general inflation, as felt by private households, fell from 4.7% in July to 4% last month, food prices were 9% more expensive compared to August 2022.

Last week, The Shift reported how an earlier NSO study with data gathered using the Harmonised Index of Consumer Prices (HICP) showed that food prices rose by almost 11% in one year despite a dip in the measure of general inflation.

The newly published data uses a different index, the RPI, which focuses its measurements on products consumed by private households. The index excludes data captured on institutional households (such as retirement homes) and foreign visitors to Malta, captured in the earlier study.

Increases in food prices accounted for almost half of the 4% annual inflation rate, contributing two full percentage points to the rate, with the next highest category, housing, contributing only 0.69 percentage points.

Transport and communications saw drops in pricing, contributing -0.59 percentage points to the annual rate.

Earlier this month, Finance Minister Clyde Caruana claimed that inflation will remain a problem for  Malta, implying the introduction of austerity measures as a response. Despite Caruana’s claims, the NSO data and data published by EUROSTAT show that inflation is slowly decreasing.

Nevertheless, public debt continues to be an issue for the country. Since Robert Abela’s premiership, public debt has risen by at least €3.5 billion to €9.2 billion by the end of June 2022 – the last publicly available data point.