Strong income tax revenue in the first five months of the year has brought the national deficit crashing down, figures released on Friday indicate.
However, public debt continues to grow and has now surpassed the €9 billion mark, the National Statistics Office figures revealed.
The government’s consolidated fund reported a deficit of €103.5 million by the end of May, according to the NSO. In the same period last year, the deficit stood at €373.6 million, meaning it dropped by €270.1 million or 72.3% year-on-year.
That reduction was possible thanks to a €325.4 million increase in recurrent revenue, which amounted to €2.45 billion between January and May. That increase was due in large part to greater income tax receipts, which were up by €179.5 million.
Spending slightly up
Total expenditure by the end of May stood at €2.56 billion, €55.3 million more than in the previous year.
Of that expenditure, €2.25 billion was recurrent, an increase of €39 million compared toMay 2022. Capital spending between January and May amounted to €222.5 million, €3.5 million higher than in 2022.
The main contributor to the increase in recurrent expenditure was a €36.3 million rise reported under operational and maintenance expenses. Furthermore, increases were recorded under several other categories but fell, by €53.1 million, in programmes and initiatives, in part due to decreased spending on pandemic assistance schemes.
On the other hand, the government spent more money than in 2022 on energy support measures, social security benefits, street lighting and other services, Tallinja cards, temporary price stabilisation schemes and residential care in private homes.
Capital expenditure was up despite the government spending €22.1 million less on road construction and improvements. That was due to increased outlays on property, plant and equipment, national identity management systems, digitalisation of health systems, film industry incentives and upgrading of existing storm-water systems.
Debt tops €9 billion
Central Government debt grew by €673.8 million between January and May and now stands at €9,083.6 million, close to €9.1 billion.
The government spent €82.9 million in interest payments to service that debt, an increase of €12.8 million when compared to the previous year.
The increase reported under Malta Government Stocks (€792.6 million) was the main contributor to the rise in debt. Higher debt was also reported under Euro coins issued in the name of the Treasury (€5.1 million).
This increase in debt was partially offset by a decrease in the 62+ Malta Government Savings Bond (€100.0 million) and Treasury Bills (€14.1 million).
Finally, higher holdings by government funds in Malta Government Stocks resulted in a decrease in debt of €9.7 million.