Deficit up by €36.4 million in first quarter 2012

During the first quarter this year, the shortfall between recurrent revenue and total expenditure of Central Government amounted to €224.6 million, an increase of €36.4 million compared to the corresponding period in 2011.

The increase in recurrent revenue of €33.6 million was outweighed by a rise in total expenditure of €70 million, widening the government deficit.

Recurrent revenue for the first three months this year stood at €522.9 million, a rise of 6.9 per cent over last year. The main contributors were Income Tax and Social Security, which generated higher returns by €27.5 million and €13.4 million respectively.

Other improvements were registered in Value Added Tax ( €4.6 million) and Licenses, Taxes and Fines ( €3.3 million). These were partly offset by a fall in proceeds from Customs and Excise Duties (-€4.7 million), the Central Bank of Malta (-€4 million) and Grants (-€3.2 million).

Compared to 2011, total expenditure was recorded at €747.4 million, up by 10.3 per cent, as a result of higher outlays on recurrent and capital expenditures.

Recurrent expenditure registered an increase of €52 million, driven by higher social security benefits and contributions to government entities by €17.1 million and €10.4 million respectively.

Moreover, increases were also recorded in personal emoluments ( €4.6 million), the transfer to the drainage directorate ( €4.2 million), EU Own Resources ( €4 million) and Operational and Maintenance Expenditure ( €3.3 million).

In addition, Government's Capital Expenditure for the period under review reached €75.4 million.

The comparative increase of €20 million was the result of an equity injection to the national air carrier. Developments in other expenditures on capital projects offset each other. Among others, these included a fall in the External Borders Fund of €6 million, partly outweighed by higher expenditure on roads infrastructure ( €3 million) and the acquisition of property for public purpose ( €1.7 million).

Conversely, the interest component of the public debt servicing costs for the period declined by €2 million.

At the end of March govcernment debt stood at €4,669.6 million, up by €354.5 million, or 8.2 per cent, over the corresponding period last year. This increase was the result of higher long-term borrowing, which added €610.8 million. On the other hand, short-term securities and foreign borrowing declined by €199.7 million and €13.1 million respectively.

Moreover, as a result of consolidation, higher holdings by government funds in MGSs resulted in a reduction of €48 million in debt. The euro coins issued in the name of the Maltese Treasury went up by €4.5 million when compared to the coin stock as at the end of March 2011, and totalled €45.2 million.