Inflation hits 2.5% in July, driven by food and transport costs

Malta’s annual inflation rate stood at 2.5% in July 2025, above the euro area average of 2.0%, according to figures of the HICP released by the National Statistics Office (NSO). The increase was primarily driven by the consistent rising trend of higher prices in food, restaurants, and transport, while declines in communication and clothing costs helped soften the overall rise.

Education (5.2%) and transport (4.6%) registered the steepest annual inflation rates among the main consumption categories. In contrast, communication (-3.1%) and clothing and footwear (-0.3%) were the only categories to record price declines during the month.

The Food and non-alcoholic beverages Index contributed the largest upward push to overall inflation, adding 0.64 percentage points, largely due to rising meat prices. Restaurants and hotels followed closely, contributing 0.62 percentage points as dining out became more expensive, while transport added 0.54 percentage points, reflecting costlier air travel and related services.

On the downside, communication exerted a negative contribution of 0.11 percentage points, mainly due to cheaper mobile phone equipment. Clothing and footwear, driven by lower footwear prices, also slightly dampened the overall index by 0.01 percentage points.

When compared to the wider euro area, Malta’s all-items Harmonised Index of Consumer Prices (HICP) shows a faster pace of price growth. While the euro area average stood at 2.0% n July, Malta’s 2.5% indicates stronger domestic price pressures, particularly in services and food-related categories.

The figures underline the continued impact of consumer services, travel, and food prices on Malta’s inflation outlook, even as some categories—such as clothing and communication – offer modest relief.