Higher revenues from tax, grants and customs improve deficit

Total expenditure went up by €59.3 million and was more than offset by an increase in recurrent revenue of €105.8 million, hence improving the government deficit by €46.5 million.

During the period under review, recurrent revenue was recorded at €1,251.0 million. The comparative increase of 9.2 per cent was mainly the result of higher returns from Income Tax (+€25.5 million), Grants (+€23.4 million), Customs and Excise (€23.2 million), Miscellaneous Receipts (+€13.2 million), Rents (+€11.9 million) and Social Security (+€10.9 million). On the other hand, Licences, Taxes and Fines declined by €7.2 million.

Total expenditure for the first seven months of the year stood at €1,573.1 million, up by €59.3 million.
The increase in recurrent expenditure was triggered by among others, a greater outlay on Social Security Benefits of €24.0 million, the reclassification of the Malta Tourism Authority (which shifted €15.1 million from capital to recurrent expenditure), and higher Personal Emoluments by €18.2 million.

Conversely, major declines were recorded in the shipyards' voluntary retirement schemes and in medicines and surgical materials, of €17.5 million and €15.1 million respectively.

Capital expenditure added €24.3 million. This was mainly due to increases in the EU Cohesion Fund 2007-2013 of €16.3 million, relating to the Malta South Sewage Treatment Infrastructure, and of €10.0 million in connection with the introduction of the Jeremie Financial Engineering Fund.

Furthermore, growths were registered in the transfers of €13.8 million to the Treasury Clearance Fund and of €8.6 million to the EU Structural Funds relating to Education. These were in part outweighed by the reclassification of the Malta Tourism Authority.

The interest component of the public debt servicing costs edged up from €116.3 million in January-
July 2009 to €116.7 million this year.

At the end of July, Central Government debt stood at €4,128.9 million, a rise of €252.3 million, or 6.5 per cent, over the corresponding month last year. The contributor to this change was long-term borrowing, which added €275.7 million and accounted for 81.6 per cent of total government debt.

On the other hand, declines were registered in short-term securities and foreign borrowing, of €13.5 million and €13.1 million respectively. The euro coins issued in the name of the Maltese Treasury rose by €4.0 million when compared to the euro coin stock as at the end of July 2009, and totalled €39.7 million.