Structural deficit down to Lm86m

The government debt outstanding at the end of May reached Lm1,337.6 million, according to provisional Central Bank data provided to the National Statistics Office.

This is an increase of Lm161.7 million, or 13.8 per cent, from the Lm1,175.9 million outstanding at the end of May last year.

This year's total includes the government's assumption of the debts of the ex-Malta Drydocks and ex-Malta Shipbuilding, an amount of Lm41.8 million, the NSO said.

For consolidation purposes, as from this year the Sinking Fund investments in government debt were deducted from the total outstanding balance.

Recurrent revenue in the first five months amounted to Lm285.5 million and made up 33.9 per cent of the budget forecast. Compared to the same period last year, recurrent revenue increased by Lm21.6 million, or 8.2 per cent.

The increase was mainly brought about by higher revenue from income tax (+Lm6.4 million) and VAT (+Lm10.0 million).

A net increase of Lm7.8 million was also registered under licences, taxes and fines, mostly by way of signing-on fees received upon the privatisation of the lotteries operation earlier this year.

These increases were partially offset by a revenue reduction from the Central Bank (-Lm6.5 million) while revenue from social security contributions was Lm0.6 million higher.

Other reasons for the comparative increase were the funds passed to Industrial Projects and Services Ltd (Lm1.2 million) and MCAST (+Lm1.1 million).

On the other hand, lower expenditure was registered under the Malta Shipyards item (-Lm3.1 million), which in 2003 featured partly under capital expenditure.

The NSO went on to explain that when compared to the first five months of 2003, recurrent expenditure (excluding public debt servicing), which so far this year made up 40.3 per cent of the budgetary estimates, increased by Lm11.4 million or four per cent, and amounted to Lm297.7 million.

The NSO also reported that the total expenditure amounted to Lm371.3 million, an increase of Lm2.3 million over the Lm368.9 million expended last year.

The structural deficit between recurrent revenue and total expenditure (excluding contributions to the Sinking Fund in respect of local and foreign loans and direct repayment of loans) amounted to Lm85.8 million, compared to a shortfall of Lm104.6 million reported for January - May 2003.

The interest component of the public debt servicing costs this year increased by Lm3.5 million, from Lm28.2 million to Lm31.7 million, mainly due to interest payments on Malta Government Stocks borrowed last year.

Capital expenditure in the period under review dropped by Lm12.2 million, or 22.5 per cent, and amounted to Lm41.9 million. The lower expenditure was incurred under finance (-Lm1.0 million), transport and communications (-Lm3.0 million), health (-Lm5.0 million) and information technology and investment (-Lm2.5 million).