Adjusted deficit for 2013 at 2.7% of GDP

In 2013, general government net borrowing (or deficit) was recorded at €202.0 million, down from €263.2 million for 2012.

Last year, the General Government deficit was equivalent to 2.7 per cent of GDP, down from 3.7 per cent for 2012.

At the end of 2013, the General Government nominal gross consolidated debt amounted to €5,241.0 million, or 69.8 per cent of GDP, up from €4,871.9 million, or 67.9 per cent for 2012.

On 30 September 2014, Malta submitted its report on government deficit and debt levels for the years 2010-2013. This was done in accordance with Council Regulation (EC) 479/2009, the first transmission using the ESA 2010 methodology.

Adjustments of -€223.1 million were made to the general government sector: positive adjustments included the time-adjusted cash transactions (€41.9 million), other accounts receivable and payable (€26.8 million), and the non-financial transactions in the treasury clearance fund (€4.9 million).

On the other hand, the main negative adjustments were the equity injection to the national air carrier (€40.0 million), the net borrowing of Extra Budgetary Units (€11.4 million), interest received not included in the consolidated fund (€2.8 million) and the adjustment for stock premium proceeds (€1.6 million)

The Stock Flow Adjustment (SFA) is the difference between the change in the stock of government debt and the flow of annual government deficit/surplus. Deficits normally contribute to an increase in debt levels, while surpluses reduce them.

However, the change in government debt also reflects other elements. In 2013, a positive SFA of 2.2 per cent of GDP means that the debt increased more than implied by the deficit.

This rise in debt was the result of an increase in other accounts payable, loans, equity and investment fund shares and other adjustments which do not appear in the deficit figures.

Conversely, the decision to utilise liquidity instead of resorting to further borrowing resulted in lower holdings of currency and deposits and hence a reducing effect on SFA.

Euro area

In 2013, the government deficit of both the euro area (EA18) and the EU28 decreased in absolute terms compared with 2012, while the government debt rose in both zones. In the euro area the government deficit to GDP ratio decreased from 3.6% in 2012 to 2.9% in 2013 and in the EU28 from 4.2% to 3.2%. In the euro area the government debt to GDP ratio increased from 89.0% at the end of 2012 to 90.9% at the end of 2013 and in the EU28 from 83.5% to 85.4%.

In 2013, Luxembourg (+0.6%) and Germany (+0.1%) registered a government surplus and the lowest government deficits in percentage of GDP were recorded in Estonia (-0.5%), Denmark (-0.7%), Latvia (-0.9%), Bulgaria (-1.2%), Czech Republic and Sweden (both -1.3%). Ten Member States had deficits higher than 3% of GDP: Slovenia (-14.6%), Greece (-12.2%), Spain (-6.8%), the United Kingdom (-5.8%), Ireland (-5.7%), Croatia (-5.2%), Cyprus and Portugal (both -4.9%), France (-4.1%) and Poland (-4.0%).

At the end of 2013, the lowest ratios of government debt to GDP were recorded in Estonia (10.1%), Bulgaria (18.3%), Luxembourg (23.6%), Romania (37.9%), Latvia (38.2%), Sweden (38.6%), Lithuania (39.0%), Denmark (45.0%) and Czech Republic (45.7%). Sixteen Member States had government debt ratios higher than 60% of GDP, with the highest registered in Greece (174.9%), Portugal (128.0%), Italy (127.9%), Ireland (123.3%), Belgium (104.5%) and Cyprus (102.2%).