Covid-19 measures push government deficit up to nearly €400m in second quarter – NSO

In the second quarter of 2020, the General Government recorded a deficit of €392.2 million, the NSO said today.

During the period April to June 2020, total revenue stood at €1,086.3 million, a decrease of €220.0 million when compared to the corresponding quarter in 2019. Decreases in revenue were registered in almost all categories, primarily due to the impact of the COVID-19 pandemic, with the largest being Taxes on production and imports (€113.1 million), followed by Current taxes on income and wealth (€75.0 million) and Capital transfers receivable (€36.7 million).

Other decreases were registered in Property income receivable (€5.1 million) and Current transfers receivable (€4.9 million). These were partially offset by an increase in Net social contributions (€9.2 million) and Market output (€5.7 million).

Total expenditure in the second quarter of 2020 amounted to €1,478.5 million, an increase of €216.7 million over the corresponding quarter in 2019. Increases in expenditure were recorded in Subsidies payable (€121.1 million), mostly in relation to the COVID-19 Business Assistance programme amounting to €129.0 million, Social benefits and social transfers in kind (€66.9 million), Intermediate consumption (€37.4 million), Current transfers payable (€34.2 million), Compensation of employees (€18.8 million) and Current taxes on income and wealth (€0.1 million).

In contrast, when compared to the corresponding quarter in 2019, Gross capital formation and Capital transfers payable registered a decrease of €40.2 million and €19.4 million, respectively. A decrease was also recorded in Property income payable (€2.0 million).

In order to achieve compliance with the provisions of ESA 2010, adjustments to the Consolidated Fund data were made. In the second quarter of 2020, these adjustments brought about a decrease of €191.7 million to the Consolidated Fund deficit.

In relation to financial transactions in assets, during the second quarter, Other accounts receivable and Currency and deposits registered an increase of €183.9 million and €17.4 million respectively, followed by Long-term debt securities (€1.9 million) and Long-term loans (€0.2 million). Considering the financial transactions in liabilities, the highest increase was recorded in Short-term debt securities (€371.3 million), followed by Long-term debt securities (€366.6 million), Other accounts payable (€204.6 million), Long-term loans (€8.3 million) and Currency and deposits (€0.1 million).

At the end of June, General Government debt stood at €6,646.0 million, an increase of €792.8 million over the corresponding quarter in 2019. This increase was largely reflected in Central Government debt, which amounted to €6,642.8 million. Currency and deposits stood at €377.9 million, an increase of €0.7 million over June 2019. This includes the euro coins issued in the name of the Treasury, considered a liability of Central Government, and the 62+ Malta Government Savings Bond, the latter amounting to €288.3 million.

Short-term and Long-term debt securities increased by €464.7 million and €304.2 million, respectively. Additionally, Long-term loans registered an increase of €20.2 million, while Short-term loans increased by €3.0 million. Local Government debt stood at €3.2 million. General Government guaranteed debt amounted to €1,064.8 million at the end of June 2020, a decrease of €1.7 million when compared to the corresponding period of 2019.