The government last year registered a deficit of €950.4 million, equivalent to 4.9 per cent of GDP while its debt amounted to €9,767.8 million or 50.4 per cent of GDP, official figures published on Monday show.
The deficit saw an improvement of €14.4 million over the deficit recorded in the previous year. The balance was calculated as the difference between total revenue (€6,483.0 million) and expenditure (€7,433.5 million). When comparing 2023 to 2022, total revenue increased by €581.0 million, while total expenditure increased by €566.7 million. When measured as a percentage of GDP, the deficit was 4.9 per cent, an improvement of 0.6 percentage points when compared to a deficit of 5.5 per cent registered in 2022.
The government debt increased by €768.1 million over 2022 and stood at €9,767.8 million. But thanks to fast economic growth, the debt-to-GDP ratio for 2023 was down to 50.4 per cent from 51.6 per cent in 2022.
Finance Ministry explains
In a reaction to the NSO data, the Ministry for Finance noted that in 2023, both the deficit and the debt as a proportion of the Gross Domestic Product (GDP) had decreased.
" These fiscal figures are more positive than those predicted in the last Budget where for the year 2023, it was predicted that the deficit as a percentage of GDP would decrease to 5.0%, while the debt ratio would amount to 52.78%," the ministry said.
It said the increase in government revenue was higher than the increase in expenditure for yet another year, reflecting the strong growth in employment and consumption. Thus, despite the several Government assistance schemes, such as electricity, fuel, gas, and cereal subsidies as well as the implementation of various capital projects including the upgrading of the country’s infrastructure and green projects, the government still succeeded in reducing the deficit, the ministry said.
Furthermore, the debt was significantly lower than what is required by the European Union debt criteria of 60% of GDP.
"The improvement in the deficit-to-GDP ratio will continue in the coming years, with a planned fiscal reduction of 0.5% every year as announced by the Minister for Finance Clyde Caruana in the Budget for the year 2024 and in line with the Economic Governance Framework after the agreement reached between the Finance Ministers of the European Union countries during an ECOFIN meeting last January," the ministry added.
Debt as a percentage of GDP. (Ministry of Finance).