The government is failing to control the deficit as expenditure is rising faster than expenditure continuing with the previous trend, according to the latest NSO figures.
By the end of July, the Government’s Consolidated Fund registered a deficit of €552.2 million, compared with €518 million during the same period last year. The deficit has therefore deteriorated by €34.2 million year-on-year, or roughly 6.6% year-on-year.
Government revenue is still growing strongly. Recurrent revenue reached €4.82 billion, an increase of €717.3 million compared with last year. Income Tax provided the largest increase at €362.8 million, followed by VAT at €153.3 million and grants at €110.3 million.
The problem remains expenditure, which is growing even faster.
Total government expenditure reached €5.37 billion, increasing by €751.6 million over the same seven-month period last year. Recurrent expenditure alone increased by €552.4 million to €4.56 billion, while capital expenditure rose by another €177.2 million.
The largest increase in recurrent spending came from Programmes and Initiatives, which rose by €272.4 million. Social security benefits increased by €98.9 million, expenditure on medicines and surgical materials rose by €31.5 million, while Malta’s contributions to EU own resources increased by €25.6 million. Personal emoluments also increased by €95.8 million.
Debt-servicing costs are also rising. Interest payments increased by €22 million to €190.1 million during the first seven months of the year.
At the end of May the deficit stood at €178 million, before widening substantially to €463.5 million by the end of June and now to €552.2 million in July.
Central Government debt meanwhile stood at €11.70 billion at the end of July, €540.3 million higher than a year earlier. Malta Government Stocks accounted for €334.7 million of the increase, while Treasury Bills increased by €305.1 million.
The figures continue to put pressure on the government’s promised fiscal consolidation. Previous NSO figures showed the broader General Government deficit reaching €339 million in the first quarter alone, while expenditure increased by 14.5% and revenue by only 2.2%.
Newsroom
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