Eight-month deficit at €209 million, driven by higher social spending

In the period January-August 2014, the deficit of the Government’s Consolidated Fund amounted to €209.9 million.

Recurrent revenue registered an increase of €149 million, offset by higher expenditure of €162 million when compared to the corresponding period last year, thereby widening the shortfall between recurrent revenue and total expenditure by €13 million.

During the first eight months, recurrent revenue was recorded at €1,986.8 million, up by 8.1 per cent over last year. The main contributors to this increase were Value Added Tax (€45.6 million), Grants (€41.9 million), Income Tax (€36.3 million) and Social Security Contributions (€33.9 million). Conversely, Customs and Excise Duties registered a decline of €30.2 million.

Recurrent expenditure increased by €123.2 million, mainly as a result of higher spending on Programmes and Initiatives (€56 million).

The major increases registered in the Programmes and Initiatives category were recorded in the public service obligations (€14.9 million), social security state contribution, which also feature as revenue (€11.8 million), the contribution to church schools (€11.7 million), social security benefits (€4.6 million) and the ex-gratia grant scheme for motor vehicles (€3.2 million), among others.

In addition, Personal Emoluments and Contributions to Government Entities increased by €32.6 million and €31.8 million respectively. Operational and Maintenance Expenditure went up by €2.8 million.

The interest component of the public debt servicing costs for the period under review amounted to €151.8 million, an increase of €3.2 million from last year.

Expenditure on Government’s capital projects amounted to €254.1 million. The increase of €35.6 million was mainly brought about by a higher contribution towards the treasury clearance fund (€14.7 million), added outlays on roads (€14.4 million) and an increase in the EU agricultural fund for rural development (€5.2 million), among others. Conversely, a lower equity injection to the national air carrier was registered.

At the end of August, Central Government debt stood at €5,390.6 million, up by €323.7 million over the corresponding period last year. This was the result of higher Long-term Borrowing, which added €351 million. On the other hand, Short-term and Foreign Borrowing went down by €40.1 million and €10.6 million respectively. As a result of consolidation, lower holdings by government funds in MGSs brought about an increase in debt of €18.5 million. The euro coins issued in the name of the Maltese Treasury went up by €4.9 million when compared to the coin stock as at the end of August 2013, and totalled €59.1 million.