Deficit at €267 million up to August 2012

During the first eight months this year, the shortfall between recurrent revenue and total expenditure of Central Government amounted to €267.6 million, up by €95.4 million compared to the corresponding period in 2011.

The increase in recurrent revenue of €101.2 million was outweighed by a rise in total expenditure of €196.6 million, widening the government deficit.

Recurrent revenue stood at €1,704.9 million, a rise of 6.3 per cent over last year. The main contributors were Income Tax ( €82.7 million), Miscellaneous Receipts ( €28.6 million), Value Added Tax ( €23.8 million) and Social Security ( €18.1 million).

These were partly offset by a decline in proceeds from Grants (-€30.2 million), Customs and Excise Duties (-€21.2 million) and the Central Bank of Malta (-€6.0 million).

Compared to 2011, total expenditure was recorded at €1,972.6 million, up by 11.1 per cent, as a result of higher outlays on all expenditure components. Recurrent expenditure increased by €123.3 million.

The major increase was recorded in Programmes and Initiatives by €83.6 million, mainly as a result of higher social security benefits ( €33.1 million), medicines and surgical materials ( €14.2 million), EU own resources ( €6.1 million) social security state contributions ( €5.6 million), which also feature as revenue, and assistance to help the elderly live independently ( €3.6 million).

Added expenditure was also recorded in Contributions to Government Entities ( €18.5 million), Personal Emoluments ( €11.8 million) and Operational and Maintenance Expenditure ( €9.5 million).

Government's Capital Expenditure for the period under review amounted to €226.7 million. When compared to the corresponding period in 2011, the increase of €63.6 million was mainly triggered by an equity injection of €20 million to the national air carrier and an increase of €13.7 million in EU funds related to the Ministry for Infrastructure, Transport and Communication, which included works on Roads Insfrastructure.

Concurrently, the contribution towards the Treasury Clearance Fund added €7.0 million, while higher outlays were recorded in ICT core services agreement ( €6.0 million) and film industry incentives ( €4.5 million).

Expenditure financed by EU funds, related to the Ministry for Resources and Rural Affairs and the Office of the Prime Minister, also went up by €4.1 million and €2.8 million respectively.

During January-August 2012, the interest component of the public debt servicing costs registered

an increase of €9.6 million. Central Government debt stood at €4,832.8 million, up by €416.9 million, or 9.4 per cent, over the corresponding period last year.

This increase was the result of higher long-term borrowing, which added €505.0 million. On the other hand, short-term securities and foreign borrowing declined by €25.9 million and €12.7 million respectively. Moreover, as a result of consolidation, higher holdings by government funds in MGSs resulted in a reduction of €54.2 million. The euro coins issued in the name of the Maltese Treasury went up by €4.7 million when compared to the coin stock as at the end of August 2011, and totalled €49.0 million.