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3 NEWS 3.8.2023 Demand for travel expected to level off or decrease - MIA CEO Maltese economy expanded at slower pace compared to previous quarter - CBM THE Maltese economy expanded at a slower pace compared to the previous quarter, the Central Bank of Malta's third issue of its quarterly review for 2023 shows. When adjusting for imports, ex- ternal trade was the main driver of growth, as the contribution of do- mestic demand though positive, was small. The Bank's estimate of the output gap remained positive but narrowed, indicating that the degree of over-uti- lisation of the economy's productive capacity has eased somewhat. The Bank's Business Conditions In- dex stood slightly above its historical average. The European Commission's Economic Sentiment Indicator rose above its long-term average. Developments in the labour market remained positive. Consumer price pressures eased somewhat, but inflation remained high from a historical perspective. The general government deficit-to- GDP ratio fell while the debt-to-GDP ratio edged up compared with the fourth quarter of 2022. GDP and employment growth in Malta were higher compared with the euro area average, while the un- employment rate was lower. Howev- er, HICP inflation was higher. While Malta's deficit-to-GDP ratio was higher than the euro area average, its debt-to-GDP ratio was lower. Monetary policy decisions taken by the Governing Council of the European Central Bank (ECB) In light of persistent inflationary pressures, the ECB raised its key in- terest rates again in February and in March. Additional increases were an- nounced in May, June, and July. From March 2023, and until the end of June, the Eurosystem began to rein- vest only part of maturing securities under the Asset Purchase Programme (APP). Such reinvestments ended as of July 2023. These decisions are re- flected in a decrease in the value of securities under this programme. The Governing Council reiterated its intention to continue reinvesting the principal payments from matur- ing securities purchased under the pandemic emergency purchase pro- gramme (PEPP) until at least the end of 2024. FROM PAGE 1 At the launch of a briefing on the airport's traffic results, Borg said that nominal airfares have increased by 32% since August 2019. However, when accounting for in- flation, real airfares have gone up by 10%. Despite strong demand for travel, Borg said that this appetite is expected to level off or decrease. He referred to a European Travel Commission travel sentiment survey, which showed 20% of respondents are unlikely to travel over the next six months. Passengers from Italy dominated 24% of the airport's market sure, wel- coming 822,810 passengers between January and June this year. UK passengers held the sec- ond-highest market share, although this share has dropped by 20% since 2019. The highest-growing markets were that of France and Poland, which in- creased by 51% and 55% respectively. Ryanair dominates the market share among the airlines at MIA, with a 47% share of the market that has grown by 25% since 2019. Air Malta holds the second-largest share at 26%. Infrastructural works underway Works are underway on the €40 million Apron X project, with Phase 1 of the project set to finish by sum- mer 2024 with the first three parking stands expected to be in operation by then. Meanwhile, the airport's second runway, RWY 23-05 will be getting a €14 million overhaul with works ex- pected to start in the fourth quarter of this year. After this is completed, works will start on the airport's main runway, the RWY 31-13. These works will include resurfacing and lighting replacements Borg said that the works are unlikely to impact the airport's schedule, but did not rule out any ad-hoc issues that may arise as small private and commercial places will share a single runway with larger passenger planes. Works will also start on phase one of the terminal expansion this year, which will entail a 1,550sqm west- ward expansion. These works are ex- pected to finish in the fourth quarter of 2024. The terminal will also benefit from upgrades to its heating and ventila- tion systems.

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