According to the newly released data by the National Statistics Office show mixed developments in Malta’s public finances in 2025: while a surplus was recorded in the third quarter, the broader trend of rising government expenditure and an ongoing budget deficit remain challenging.
In the third quarter of last year, the general government registered a surplus of €82.6 million in the third quarter of 2025 compared with the same period in 2024. Total revenue increased by €151.5 million year-on-year to €2,17 billion, outpacing the increase in total expenditure which rose by €80.7 million to €2,08 billion. Government debt stood at €11,21 billion at the end of September, equivalent to approximately 46.5% of GDP.
When viewed over a longer period, fiscal pressures persist and as the latest data shows that the Consolidated Fund recorded a €474.3 million deficit by the end of November, substantially larger than the €102.5 million deficit recorded in the same period last year. Recurrent revenue increased by €316.1 million, but total expenditure grew faster — by €688.0 million — driven by higher recurrent outlays, interest costs and capital spending. Central government debt also rose sharply to €11,36 billion by late November.
This data confirms the trend of the government risks losing control of its fiscal policy to offset expenditure with revenue with a €373.9 million deficit recorded through October.
Over the full year to November, recurrent and capital spending increases have outstripped revenue increases, contributing to a wider overall deficit. The increase in expenditure is mostly attributed to social security benefits, EU contributions and major infrastructure projects (such as energy interconnectors and transport initiatives) has been a significant factor.
The government forecasts the deficit to ease from 3.7 per cent of GDP in 2024 to about 3.3 per cent in 2025 and further to 2.8 per cent in 2026 — but actual data indicates the gap may remain more stubborn than forecast.
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