Restricted government spending after January cuts deficit by €57.1 million

An increase of €73.7 million in recurrent revenue outweighed the added expenditure of €16.6 million, resulting in a reduction of €57.1 million in the government deficit for the three months of January to March, when government spending had to be restricted to 30% of the budget which did not pass in December 2012, prompting early elections.

Malta's deficit for 2012 stands at 3.3% of GDP.

During the first quarter, recurrent revenue stood at €596.5 million, up by 14.1 per cent over last year. This was mainly due to higher proceeds from Grants (+€48.1 million), Income Tax (+€36.1 million) and Social Security (+€9.0 million). These were partially offset by lower returns from Value Added Tax by €10.9 million.

Total expenditure amounted to €764.0 million, up by 2.2 per cent compared to last year, as a result of added outlays on capital expenditure.

Recurrent expenditure went down by €10.1 million. This was mainly due to lower outlays on programmes and initiatives by €6.4 million, as a result of a decline in expenditure on street lighting and EU own resources. Moreover, contributions to government entities and operational and maintenance expenditure went down by €6.0 million and €5.9 million respectively. Conversely, an increase of €8.2 million was registered in personal emoluments.

Expenditure on government's capital projects was registered at €104.1 million. The increase of €28.8 million over the corresponding period in 2012 includes an equity injection of €40.0 million to the national air carrier, up from €20.0 million last year. An increase in capital outlays was also recorded in road construction and in the ICT core services agreement, by €4.0 million and €3.0 million respectively.

During the period under review, the interest component of the public debt servicing costs went down by €2.1 million to €51.4 million.

At the end of March, Central Government debt stood at €4,976.7 million, up by €307.1 million over the corresponding period last year. This was the result of higher short-term and long-term borrowing, which added €71.5 million and €215.1 million respectively. On the other hand, foreign borrowing went down by €12.4 million.

Moreover, as a result of consolidation, lower holdings by government funds in MGSs resulted in an increase in debt of €27.3 million. The euro coins issued in the name of the Maltese Treasury went up by €5.6 million when compared to the coin stock as at the end of March 2012, and totalled €50.8 million.