Malta’s debt has continued to rise, coming within touching distance of the €10 billion mark, according to new national statistics published on Friday, whilst the government has successfully slashed its deficit in the first quarter of this year.
Malta’s debt now stands at €9.97 billion, up from the €9.24 billion recorded at the same point last year, equivalent to 50.4% of Malta’s GDP.
This is a slight decrease from the 51.6% recorded a year ago, and well below the high of 56.8% at the height of the pandemic in early 2021. But it remains far higher than pre-Covid ratios, which tended to hover around the 40% mark.
Malta remains well placed to keep its debt-to-GDP ratio under the 60% mark to avoid falling foul of EU regulations over debt levels, something it has failed to do for its deficit.
Last month, the European Commission warned eight member states, including Malta, over their excessive budget deficits, with Finance Minister Clyde Caruana telling parliament that Malta is on course to bring its deficit in line.
Government earning and spending more than ever
Data for the first quarter of 2024 shows that the government’s revenue has shot up by a fifth compared to the same period last year, now almost reaching €1.69 billion.
But its spending has also increased, albeit at a slightly lower rate of 5.5%, to reach €1.75 billion, meaning that Malta’s deficit for the first three months of the year was of €59 million.
The increased revenue appears to be driven by more tax collection, with almost €650 million collected in taxes on income and wealth between January and March, roughly €150 million more than in the first quarter of 2023.
The government also received €70 million more in taxes on imports and production and increased its income from social contributions by €30 million.
On the other hand the government’s spend on its employees has shot up to almost €511 million, more than any other point in its history, and €30 million more than during the same period in 2023.
Government spending on social benefits has also risen drastically by some €53 million compared to the first quarter of last year.