Malta’s national deficit stood at €514.9 million at the end of July, with the country having shaved hundreds of millions off its budget shortfall over the previous 12 months.
The deficit figure reported by the National Statistics Office for July is €366.2 million smaller than that reported 12 months prior, when the deficit as of July came in at just over €881 million, and almost half the €1 billion deficit Malta had racked up in July 2020.
The positive budgetary development came on the back of surging revenue, which was up 14.7 per cent when compared to July 2021. The lion’s share of that revenue remains income tax, which brought in just over €1 billion in the first seven months of the year, an increase of €120 million from the previous year.
Income tax, VAT and social security income together made up more than 79 per cent of recurrent government revenue between January and July.
Government income from VAT (€+130 million), licences, taxes and fines (+€198 million), social security (+€74 million) and grants (+€40 million) was also up significantly when compared to the previous year.
While government expenditure also rose, it only increased by 0.6 per cent over the same period in 2021. All that increase came from recurrent expenditure items, with spending on programmes and initiatives (+€41.8 million) and personal emoluments (+€10 million) the most significant increases. Counterwise, spending on operational and maintenance expenses was down by €24 million to total €132 million.
Capital expenditure declined four per cent to reach €315 million by the end of July. Twelve months prior, it stood at €328.6 million while in July 2020 it hit a high of €478 million.
The government spent less on property, plant and equipment (€10.3 million), road construction and improvements (€8 million), the Gozo Aquatic Centre (€7.7 million), investments in physical assets (€4.2 million), acquisitions of property for public purposes (€3.7 million) and national identity management systems (€3.1 million) when compared to July 2021.
It spent more on investment incentives (€12.7 million), film industry incentives (€8.6 million) and payments related to home ownership scheme (€2.7 million).
Overall, capital expenditure represented 8.9 per cent of all government spending.
While work to reduce the deficit – and eventually return the budget into surplus territory – appears to be on track, taxpayers continue to fork out significant sums to service national debt interest payments.
Interest payments totalled €100.8 million by the end of June, with the national debt rising by 9 per cent to hit €8.6 billion. A huge portion of that one-year increase in the debt burden, €568 million, came through newly-issued Malta Government Stocks.