21% reduction in deficit during first four months 2013

The decrease in the shortfall was mainly due to an increase of €79.2 million in recurrent revenue which outweighed the added expenditure of €29.9 million, resulting in a reduction of €49.2 million in the government deficit.

Malta is facing an excessive deficit procedure by the European Council for breaching the 3% deficit ceiling.

During January-April 2013, recurrent revenue stood at €827.8 million, up by 10.6 per cent over last year. This increase was mainly due to higher proceeds from Grants (+€47.9 million), Income Tax (+€39.1 million) and Social Security (+€10.1 million). These were partially offset by lower returns from the Central Bank of Malta (-€12.0 million), Customs and Excise Duties (-€4.9 million) and Dividends on Investments (-€4.4 million).

Compared to 2012, total expenditure amounted to €1,010.8 million, up by 3.0 per cent, as a result of added outlays on capital and recurrent expenditure.

Recurrent expenditure advanced by €12.5 million. This was mainly triggered by higher outlays on personal emoluments and contributions to government entities by €16.5 million and €1.8 million respectively.

On the other hand, operational and maintenance expenditure went down by €5.6 million. Programmes and initiatives registered a marginal decline of €0.3 million. The €6 million increase in social security benefits was offset by a fall in the allocation to local councils by €5.2 million and a lower administration fee to Transport Malta by €1.8 million.

Expenditure on government's capital projects was registered at €124.4 million. The increase of €17.2 million over the corresponding period last year includes an equity injection of €40 million to the national air carrier, up from €20 million last year. Conversely, ICT core services agreement and investment incentives went down by €1.2 million and €1.1 million respectively.

During the period under review, the interest component of the public debt servicing costs was recorded at €70.3 million, up by €0.2 million from last year.

Central Government debt stood at €4,936.4 million, up by €260.3 million over the corresponding period last year. This was the result of higher short-term and long-term borrowing, which added €215.1 million and €68.4 million respectively.

On the other hand, foreign borrowing went down by €11.9 million. Moreover, as a result of consolidation, higher holdings by government funds in MGSs resulted in a decrease in debt of €16.7 million. The euro coins issued in the name of the Maltese Treasury went up by €5.4 million when compared to the coin stock as at the end of April 2012, and totaled €51.2 million.