(Adds government's reaction)
The government’s financial situation in April continued to worsen at an alarming rate, the Labour Party’s spokesman for finance said.
Karmenu Vella said that according to figures published by the National Statistics Office, the deficit had reached €232 million, which was the highest ever in the first four months.
The deficit, Mr Vella said, was €90 million more than in the same period last year. But, in reality, it was much higher as the €232 million figure did not include the expenditure on the new parliament project.
Mr V ella said it was clear that the problem was in recurrent expenditure, which had increased by 11 per cent. This was at a time when the economy grew at a much slower rate in nominal terms.
According to the latest financial figures, debt servicing expenditure increased by €5 million in the first four months when it had been planned to increase by €2.5 million for the whole of 2012.
Expenditure on social benefits (programmes and initiatives) increased by €57 million in the first four months when this had been planned to increase by €37 million (€20 million more than planned).
Contributions to government entities had to go up by €13.5 million in a year but these had already gone up by €12.7 million in the first four months.
Mr Vella said that, in the first four months, the government had already surpassed its aim for the year by around €87 million.
On debt, he said that this had gone up to €4,676.1 million. If the €100 million extra budgetary units and the €15 million from the European Financial Stability Fund were added to that, the debt would reach €4,791 million. This was already over the government’s €122 million target for the whole year.
In these circumstances, the government should explain if it still believed its targets and if it was confident that they would be met. It should say what measures it would take during the rest of the year for the country’s precarious financial situation to return to the established targets.
In a reply, the government said that while the opposition continued with its work to hinder investment, in a report on all EU states the European Commission said yesterday that the Maltese economy was growing at a higher rate than the EU average and noted that the country’s deficit was below the three per cent European limit.
The government said the opposition tried to give the impression that the deficit was growing month after month quoting statistics of particular months without giving the full picture
The country’s strong financial situation was certified repeatedly in the past months including by the Eruoepan Commission, the International Monetary Fund and the International Labour Organisation.
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