The deficit in the government’s consolidated fund reached €882.5 million by the end of July, according to data published by the National Statistics Office.
A finance ministry half-year report has confirmed that Malta is facing a projected deficit of €1.6 billion for 2021, a marked increase from earlier projections made last year of 5.9%.
The NSO said that in the first seven months of the year, recurrent revenue amounted to €2,616.6 million, 24.2% more than the same period last year. The largest increase was recorded under Income Tax (€283.8 million).
By the end of July, total expenditure stood at €3,499.1 million, 10.8% more than in the previous year.
There was also an increase in recurrent expenditure, which totalled €3,072.8 million, up €499.6 million from the previous year. The main contributor to this increase was a €388.2 million rise reported under programmes and initiatives.
COVID measures
The largest increase in this category was related to the COVID-19 pandemic assistance scheme (€231.4 million), which includes the COVID-19 business assistance programme.
Other increases were reported under hospital concession agreements (€41 million), the economic regeneration voucher scheme (€30.5 million), and social security benefits (€26.7 million).
The interest component of the public debt servicing costs totalled €103.5 million, a decrease of €3.1 million when compared to the previous year.
By the end of July, government’s capital spending amounted to €322.8 million, €155.4 million lower than 2020.
The drop largely resulted from the reclassification of the COVID-19 business assistance programme(€154 million), which featured under capital expenditure between March and December but is now classified under recurrent expenditure.
The difference between total revenue and expenditure resulted in a deficit of €882.5 million being reported in the government’s consolidated fund at the end of July.
Compared to the same period in 2020, there was a decrease in deficit of €169.3 million. This difference mirrors an increase in total recurrent revenue (€510.5 million), partially offset by a rise in total expenditure. Changes in expenditure and revenue reflect developments related to COVID-19.
At the end of July, central government debt stood at €7,848.4 million, a €1,224.2 million rise from 2020.
Increases reported under Malta government stocks (€857.9 million) and foreign loans (€419.9 million) were the main contributors to the rise in debt.
EU loan
The latter increase in debt was a result of the €420 million EU loan from the temporary support to mitigate unemployment risks in an emergency (SURE) instrument.
Higher debt was also reported under euro coins issued in the name of the Treasury (€1.2 million).
This rise in debt was partly offset by a decrease in treasury bills (€46.8 million) and the 62+ Malta Government Savings Bond (€5.1 million).
Lower holdings by government funds in Malta government stocks resulted in a decrease in debt of €2.9 million.
Gross domestic product
In other statistics on the gross domestic product issued later on Friday, the NSO said provisional estimates indicate that this amounted to €3,475.3 million for the second quarter of 2021, registering an increase of €448.6 million, or 14.8%, when compared to the same quarter of 2020.
In volume terms, GDP rose by 13.4%, following the drop of 15% registered a year earlier as a result of the pandemic.