The latest public finance statistics published by Eurostat show that in the third quarter of 2018, Malta recorded the highest fiscal surplus (3.8%), and the largest decrease in its debt-to-GDP ratio (-3.1 p.p.) among the 28 EU member states.

According to the National Statistics Office, the government recorded a surplus of €128 million in the third quarter of 2018, as total revenue increased to €1,235 million, while total expenditure amounted to €1,107 million.

The increase in revenue was boosted by significant growth in revenue from both direct and indirect taxes reflecting the record increases in employment and the robust growth in private consumption.

On the expenditure side, the increases mainly reflected the expenditures on the income tax relief budget measure, on education and social benefits, as well as on wages and salaries reflecting the enhanced collective agreements of public sector employees. Additional expenditure was allocated to cover the Malta’s Own Resources transfers to the EU and EU funds transfers to entities outside government.

As a result of these developments, the general government debt for the third quarter of last year decreased both in absolute terms and in per cent of GDP: the debt-to-GDP ratio fell to 45.9 per cent, reflecting a €326 million decrease in national debt. This is well below the 60 per cent benchmark set by the EU.

Minister for Finance Edward Scicluna said in a statement that such records continue to “keep Malta at the top of the EU’s fiscal ranking, thanks to the number of structural reforms undertaken by this government during the last six years”.