Maltese government deficit slightly grows to €156.2m in H1

(source: Pixabay/Kevin Schneider)

Last Updated on Monday, 29 July, 2019 at 10:55 am by Christian Keszthelyi

The Maltese government’s recurrent revenue was up by 14% (€266.2m) to €2.164b and the total expenditure increased by 13.7% to €2.320b, with the recurrent expenditure growing by €210.3m to €2.066b in the first half of the year, as compared to the same half a year earlier, according to data published by the National Statistics Office (NSO). The difference between total revenue and expenditure resulted in a deficit of €156.2m in H1 2019. In addition, the debt of the central government stood at was up by a year-on-year €0.6m to €5.480b in June.

The primary reason for the revenue increase was a €90.9m rise in income tax.

Moreover, growth was registered under value-added tax (€56.9m), social security (€47m), grants (€44.3m), licences, taxes and fines (€15.7m), rents (€10.1m), customs and excise duties (€7.3m), miscellaneous receipts (€6.8m), fees of office (€3.6m) and reimbursements (€3.5m).

Nevertheless, drops in outlay were recorded under dividends on investment (€11.9m) and the Central Bank of Malta (€8m).

The main contributor to the expenditure increase was a €141.3m rise in programmes and initiatives. Furthermore, rises in outlay were also registered by personal emoluments (€34.6m), contributions to government entities (€21.1m) and operational and maintenance expenses (€13.4m).

The main developments in the programmes and initiatives category involved added outlays due to European Union own resources (€29.2m), state contribution (€18.3m that also features as revenue), extension of school transport network (€16.2m), social security benefits (€15m), contingency reserve (€12.9m), tax relief measures (€11.5m), medicines and surgical materials (€9.5m), cancer treatment, landscaping — Malta (both €6.8m), ex gratia payment — motor vehicles (€4.9m), childcare for all (€3.5m), solid waste management strategy (€3.4m), residential care in private homes (€3.3m) and feed-in tariff (€2.5m).

The interest component of the public debt servicing costs amounted to €94.2m in H1, some €6.7m lower than the same period in 2018.

In addition, the government’s capital expenditure registered an increase of €76.8m from the same period last year and added up to €219.5m.

The rise in outlay was due to increased outlay reported on road construction and improvements (€22.2m), EU internal security fund borders and visa (€14.6m), EU cohesion fund 2014-2020 (€14.2m), EU structural funds 2014-2020 (€13.3m), and investment incentives (€10.7m).

The government deficit of €156.2m, as reported in the Government’s Consolidated Fund by the end of June 2019, increased as compared to a deficit of €141.9 million in the same period in 2018. The main reason for the deficit is the difference between total revenue and expenditure was a higher reported increase in total expenditure in comparison to recurrent revenue.

Moreover, the government’s debt was caused by the result of an increase reported under the 62+ Malta Government Savings Bond (€98.3m) and also euro coins issued in the name of the treasury rose by €5.5m.

Finally, further decreases were recorded under Malta Government Stocks (€86.9m), Treasury Bills (€2.2m) and Foreign Loans (€0.2m). Higher holdings by government funds in Malta Government Stocks also resulted in a decrease in debt of €13.9 million.

The full report including charts and visual representation of data is available for download at the website of NSO.

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