Revised deficit for 2023 at 4.5% of GDP, debt levels down to 47.4%

The budget deficit in 2023 climbed to 4.5% of GDP, a total of €938.9 million but government debt was still far lower than the Maastricht ceiling, with 47.4% of GDP – €9.79 billion.

The deficit, the result of total spedning of €7.5 billion compared to €6.56 billion in revenues, was still an improvement of €15.5 million over that of 2022 (5.2% of GDP).

When comparing 2023 to 2022, total revenue increased by €626.1 million, while total expenditure increased by €610.5 million.

Debt increased by €780.5 million over 2022, but in terms of GDP it fell from 49.4% to 47.4% in 2022.

The NSO said the 2023 deficit figure is the result of several accrual-based adjustments to the government’s consolidated figure, which had registered an €808 million deficit.

The largest negative adjustment was related to €402 million in Treasury Department accruals, adjustments for the EU Funds neutralisation, and COVID-19 tax deferrals. Other negative adjustments were Treasury Clearance Funds (TCF) in non-financial transactions (€11.8 million), rerouted transactions inside the General Government sector and public-private partnership (PPP) agreements (€8.9 million), and the recording for payable tax credits (€6.1 million).

Positive adjustments included time-adjusted cash transactions (€160.7 million) and an increased surplus recorded by the EBUs, which reached €119.7 million, an increase of €32.5 million when compared to 2022.

Other increases were the difference between interest paid and accrued (€10.6 million), interest received from the sinking fund (€5.8 million) and the aggregated surplus from Local Government of €0.6 million.

Reporting and updates

On 30 September 2024, Malta submitted the government deficit and debt levels for the years 2020-2023, as part of the Excessive Deficit Procedure (EDP) Notification.

When compared to the previous submission of 28 March 2024, the deficit of the general government was revised down for all the years under review, with the main revisions being in 2023 (-€11.5m), 2022 (-€10.3m) and 2021 (-€5.6m). The main revision was due to updated data relating to the payable tax credits, in 2022 (-€8.7m) and in 2023 (-€14.4m).

Additionally, the availability of audited financial statements for EBUs and local councils resulted in a combined downward revision of the fiscal balance, amounting to €0.8 million in 2020, €5.8 million in 2021, €1.8 million in 2022, and €0.1 million in 2023.

The revisions in General Government debt were due to the inclusion of the European Financial Stability Facility (EFSF) deferral interest, as along with the availability of audited accounts for EBUs and local councils.

As a result, the debt figures were revised upwards by €8.7 million for 2020 and €9.7 million for 2021, with more significant revisions of €11.2 million and €23.6 million for 2022 and 2023, respectively.