Deficit ‘to explode’ in 2014, says PN

Fresh from accusing the government of “distorting” Malta’s deficit figures, the Nationalist Party has accused the government of postponing its spending to a deficit decrease, claiming that the prime minister’s attempt to limit Malta's deficit has been completely undermined by the "exploding" 2014 deficit.

NSO statistics show that the deficit between January and March 2014 amounted to €225.6 million, an increase of €58.1 million when compared with corresponding period last year, while in addition, recurrent revenue and expenditure increased by €41.3 million and €99.4 million respectively.

Eurostat statistics revealed that during 2013, Malta’s deficit stood at 2.8% of Malta’s GDP, down by 0.5% when compared with 2012.

“These deficit figures mean that during 2013, the government postponed its spending, but now three months into 2014, the deficit has exploded, and increased by €58.1 million.”

“The deficit in the first three months of 2014 undermines Joseph Muscat’s boasting and presents a true picture: that in 2013, Muscat did not limit the deficit, but he merely postponed important decisions,” PN spokespersons Mario de Marco and Tonio Fenech said.

In addition, the party claimed that the €60 million increase in deficit further undermines the Prime Minister’s attempt of blaming the financial shortcomings on the previous Nationalist administration.

Government finance data revealed that in 2013, Malta’s national debt stood at €5.2 billion, an increase of €372 million when compared with 2013 – a bone of contention for the PN who has accused the government of not explaining where it spent the additional money.

“The figures published today shed further doubt on how the government achieved a deficit rate of 2.8% in 2013, while at the same time it posted nearly a €400 million in national debt,” the PN said.

While defending its financial performance, Prime Minister Joseph Muscat this afternoon took a swipe at the previous PN administration in arguing that €300 million of 2013’s €372 million debt was incurred by the previous Nationalist administration.

“The fact that during the first quarter of 2014 Malta posted an increase of €60 million to its deficit when compared with the first three months of 2013 – a period of an electoral campaign – completely undermines the prime minister’s attempt to blame the financial shortcomings on the PN,” the Nationalist Party claimed.

Rebutting the PN's allegations, Muscat, also insisted that irrespective of the increase in debt, Malta’s deficit rates should be calculated on the shortfall between the government’s expenses and revenue, reminding the Nationalist Party that this stands at 2.8%, just below the 3% of GDP deficit threshold in 2013.