A deficit of €312.5 million was reported in the government’s consolidated fund in the first quarter of 2020, more than double last year's deficit of €134.2 million in the same period.
The National Statistics Office said that between January and March, recurrent revenue fell by €88.9 million and totalled €925.6 million. This reflected an 8.8% decline from the €1,014.5 million reported in revenue by the end of the first quarter of 2019.
The main drops in revenue were reported under grants (€25.6 million) and income tax (€24.4 million). Added revenue was registered under miscellaneous receipts (€3 million), dividends on investment, and rents (both €0.5 million).
By the end of March, total expenditure amounted to €1,238.1 million, a 7.8% increase over the same quarter in 2019.
Recurrent expenditure stood at €1,035.3 million, representing a €42.2 million increase from the €993.1 million recorded by the end of March 2019.
The main contributor to this increase was a €28.2 million rise reported under contributions to government entities. Rises in outlay were also registered by programmes and initiatives (€20.6 million) and personal emoluments (€2.4 million), while operational and maintenance expenses declined by €8.9 million.
The main developments in the programmes and initiatives category involved added outlays towards the public service obligation for public transport (€14.2 million), social security benefits (€13.4 million) and the extension of the school transport network (€7 million).
These increases were partially offset by reported drops in social security state contribution (€6.8 million, also reported as revenue) as well as medicines and surgical materials (€5.3 million).
The interest component of the public debt servicing costs totalled €45.7 million, €4 million lower than the same period in 2019.
The COVID-19 effect
In January-March 2020, government’s capital spending amounted to €157.2 million, an increase of €51.2 million over the first quarter of 2019. The rise was largely due to additional spending towards investment incentives (€40.2 million) which amounted to €58 million, including €50 million spent in relation to COVID-19 business assistance.
Other increases were reported in road construction and improvements (€16.5 million), property, plant and equipment (€7.4 million), the EU agricultural fund for rural development 2014-2020 (€3.6 million) and the electricity distribution centre at Ricasoli (Smart City) (€2.5 million).
On the other hand, there were drops reported under the EU internal security fund - borders and visa (€14.5 million) and structural funds 2014-2020 (€4.7 million).
The difference between total revenue and expenditure resulted in a deficit of €312.5 million being reported in the government’s consolidated fund by the end of March. This represented an increase in the deficit of €178.3 million when compared to that of €134.2 million witnessed during the same quarter in 2019.
The main driver of the difference was an increase in total expenditure, consisting of recurrent expenditure (€42.2 million), interest (-€4 million) and capital expenditure (€51.2 million), in conjunction with a drop in recurrent revenue (€88.9 million).
Decreases in revenue and increases in expenditure reflected developments related to COVID-19.
By the end of March, central government debt stood at €5,550.3 million, a €47.8 million rise from March 2019. This was primarily the result of an €86.2 million increase exhibited under Treasury Bills, in addition to a rise in euro coins issued in the name of the Treasury (€5 million).
There were drops in debt registered under Malta government stocks (€22.6 million), the 62+ Malta government savings bond (€2.8 million) and foreign loans (€0.1 million). Higher holdings by government funds in Malta government stocks also resulted in a decrease in debt of €17.9 million.