Government consolidated fund reports €432.7 million deficit at end of 2024

Updated 5.30pm with Labour reaction

By the end of December 2024, the government’s consolidated fund reported a deficit of €432.7 million, according to national data published on Friday.

Between January and December 2024, recurrent revenue amounted to €7,859.6 million - €1,446.6 million higher than the figure reported a year earlier, the National Statistics Office said.

The largest increases were recorded under income tax (€957 million), VAT (€182.4 million) and social security (€154.2 million).

The total expenditure until the end of 2024 stood at €8,292.3 million - €1,073.4 million higher than the previous year.

In a statement, the NSO said that during the reference period, recurrent expenditure totalled €6,890.3 million - an increase of €883.8 million compared to the €6,006.5 million reported the year prior.

The main contributor to this increase was a €525.5 million rise reported under programmes and initiatives.

Further increases were also recorded under personal emoluments (€215.6 million), contributions to government entities (€89.6 million) and operational and maintenance expenses (€53.1 million).

The main developments in the programmes and initiatives category involved higher outlays towards social security benefits (€167.8 million), national airline restructuring assistance (€105.9 million) and EU own resources (€68.4 million).

The interest component of the public debt servicing costs totalled €261.4 million - an increase of €47.2 million when compared to the previous year.

Meanwhile, throughout the year, the government’s capital spending amounted to €1,140.6 million - €142.5 million higher than the comparative period in 2023.

This rise resulted from increased spending towards energy infrastructure (€125.0 million), infrastructural investment programme (€65.1 million) and property, plant and equipment (€30.4 million).

The rise in capital was partially offset by the reclassification of the national airline restructuring assistance (€40.5 million), which featured under capital expenditure in 2023 but is now classified within the programmes and initiatives category.

Other decreases were recorded in contribution towards capital projects (€27 million) and investment incentives (€18.9 million).

The difference between total revenue and expenditure resulted in a deficit of €432.7 million reported in the government’s consolidated fund at the end of December 2024 - a €373.2 million drop from the €805.9 million deficit registered in the prior year.

This difference mirrors an increase in total recurrent revenue (€1,446.6 million), partly offset by a rise in total expenditure, which consists of recurrent expenditure (€883.8 million), interest (€47.2 million) and capital expenditure (€142.5 million).

At the end of December 2024, central government debt stood at €10,467.6 million - an increase of €727.7 million when compared to 2023.

The increase reported under Malta Government Stocks (€791.9 million) was the main contributor to the rise in debt.

Higher debt was also reported under treasury bills (€23.2 million) and euro coins issued in the name of the treasury (€4 million).

This increase in debt was partially offset by drops in 62+ Malta Government Savings Bond (€25.8 million) and foreign loans (€0.1 million).

Moreover, higher holdings by government funds in Malta Government Stocks resulted in a decrease in debt of €65.4 million, the NSO added.

In a statement on Friday, the government said the data issued by NSO reflected the best financial results for the government since 2019. 

The data also confirmed the government had reached the targets set in its budget for the year. 

It noted that income tax was the biggest source of income for the government - €3.4 billion was collected in tax last year - nearly a billion more than the previous year. 

Labour: Public finances are in good hands

The Labour Party reacted positively to the NSO data, saying the Labour-led government "has once again demonstrated a steady hand in managing public finances by reducing the deficit much more than it had actually predicted." 

It said the improvement came about at a time when the government also spent significant money in the social sector and on sector agreements to improve salaries and working conditions for many workers, mainly all educators and public service workers. 

It said that when coupled with a tax cut introduced in last year's budget, the difference between it and the PN Opposition "couldn't be clearer". 

"They can't even keep their party's finances in good shape," Labour said of the PN. "They were unable to come up with a pre-budget document, which ultimately had 'no beef'.

"On the other hand, the Labour Government is continuing to make strategic decisions in favour of the people, including the energy subsidies and interventions that enabled it to address inflation."