Government spending hit €618 million last month, up by two thirds from the previous year, reflecting the cost of pandemic support and investment in road infrastructure.

Information from the National Statistics Office also shows the deficit was the largest in 20 years.

The government’s consolidated fund reported a deficit of €324 million by the end of January, the National Statistics Office said, quardruple the €75.7 million deficit in the same month in 2020. 

It is down to the sharp increase in expenditure and a smaller drop in revenue.

The change in the January deficit from 2001 to 2021. Source: National Statistics Office

"Decreases in revenue and increases in expenditure reflect developments related to COVID-19," the NSO said.

In January, recurrent revenue amounted to €294 million, compared to €306 million a year earlier.

The largest decrease was recorded under licences, taxes and fines (€19 million). 

On the other hand, total spending stood at €618 million, 62.1 per cent higher than in the first month of 2020.

The main contributor to this increase was a €160 million rise reported under 'programmes and initiatives'. 

The two main developments in this category involved added spending on social security benefits (€49 million), following two regular payments of retirement pension made in January, and the COVID-19 pandemic assistance scheme (€36 million), which includes the business assistance programme.

How government spent and earned money in January. Source: National Statistics Office

By the end of January, government’s capital spending amounted to €58 million, €27 million higher than in 2020.

The rise largely resulted from increased expenditure was led by road construction/improvements (€13 million) followed by investment incentives (€5 million).

At the end of January, central government debt stood at €6,832 million, a €1,439 million rise from 2020.

Increases reported under Malta Government Stocks (€873 million) and Treasury Bills (€346 million) were the main reasons for the rise in debt.

Foreign loans registered an increase of €119.9 million, largely reflecting the new EU loan of €120 million from the temporary support to mitigate unemployment risks in an emergency instrument.

Higher debt was also reported under the 62+ Malta Government Savings Bond (€91 million) and euro coins issued in the name of the Treasury (€1 million).

Lower holdings by government funds in Malta Government Stocks resulted in an increase in debt of €8.2 million.