Malta's 10.1% deficit in 2020 was the second highest in the European Union, new data published by Eurostat, the statistical arm of the EU has found.

According to Eurostat, all member states reported a deficit last year, with the government deficit of both the EU and the euro area increasing significantly from the year prior, in context of the impact of measures taken to address the COVID-19 pandemic.

The highest deficits were recorded in Spain (11%) followed by Malta, Greece (9.7%), Italy (9.5%), Belgium (9.4%), France and Romania (both 9.2%), Austria (8.9%), Slovenia (8.4%), Hungary (8.1%), Croatia and Lithuania (both 7.4%) and Poland (7%).

All member states except Denmark (1.1%), registered deficits higher than 3% of their GDP.

In the EU, the average government deficit went from 0.5% to 6.9% while the government debt to GDP ratio increased from 77.5% at the end of 2019 to 90.7% at the end of 2020.

According to the data, Malta’s GDP at market price went from €13.5 billion in 2019 to €12.8 billion in 2020 and from a surplus of €50 million in 2019 to a deficit of €1.3 billion in 2020. Government expenditure also increased from 36.8% of the GDP in 2019 to 46.6% in 2020.

In February, Economy Minister Clyde Caruana said that safeguarding the economy and protecting jobs came before considerations of the deficit.

Detailing the impact of COVID-19 on the economy in parliament earlier this year, Caruana said that revenue from VAT had dropped by €450 million while revenue from income and corporate tax was down by €200 million.

The government had spent €360 million on the COVID-19 wage supplement and increased spending on health by €110 million, which together accounted for 4% of the GDP.

"The government's priority was not its debt or deficit, however important. The overriding priority was the economy in general. It is useless having a lower deficit when ultimately the various sectors of the economy end up on their knees," Caruana said at the time.