Deficit up by €24 million in first half of 2014

Government deficit has gone up to €265.2 million in the period January-June 2014 on the back of increased spending and revenue.

During the first six months, recurrent revenue registered an increase of €106.8 million while expenditure went up by €130.9 million, compared to the corresponding period last year, widening the shortfall between recurrent revenue and total expenditure by €24.0 million.

During January-June 2014, recurrent revenue was recorded at €1,414.3 million, up by 8.2 per cent over last year. The main contributors to this increase were Grants (€32.6 million), Value Added Tax (€31.0 million) and Social Security Contributions (€27.4 million). Conversely, Customs and Excise Duties registered a decline of €6.1 million.

Recurrent expenditure increased by €118.1 million, mainly as a result of higher spending on Programmes and Initiatives (€66.5 million).

The major increases registered in the Programmes and Initiatives category were recorded in the public service obligations (€11.9 million), the social security state contribution, which also feature as revenue (€7.1 million), social security benefits (€6.7 million), medicines and surgical materials (€6.8 million), feed-in tariff (€5 million), EU own resources (€4.8 million), the contribution to church schools (€4 million) and the ex-gratia grant scheme for motor vehicles (€3.2 million).

In addition, personal emoluments and contributions to government entities increased by €24.6 million and €21.2 million respectively. Operational and Maintenance Expenditure went up by €5.8 million.

The interest component of the public debt servicing costs for the period under review amounted to €111.2 million, at the same level recorded last year.

Expenditure on government’s capital projects amounted to €191.5 million. The increase of €12.8 million was mainly brought about by higher outlays on roads (€15.3 million), external orders fund (€8.5 million), and EU Structural Funds (€6.3 million). These were partially outweighed by a lower equity injection to the national air carrier (Table 1).

At the end of June, government debt stood at €5,484.2 million, up by €438.9 million over the corresponding period last year, a result of higher long- and short-term borrowing, which added €379.8 million and €71.3 million respectively.

On the other hand, foreign borrowing went down by €10.6 million. As a result of consolidation, higher holdings by government funds in MGSs brought about a decrease in debt of €6.3 million. The euro coins issued in the name of the Maltese Treasury went up by €4.8 million when compared to the coin stock as at the end of June 2013, and totalled €57.1 million.