Deficit down by €230 million in the past two years

National statistics show that the deficit of the government’s consolidated fund has decreased by €230 million in the past two years.

In 2014, Government’s Consolidated Fund registered a deficit of €136.3 million. During January-December 2014, recurrent revenue registered an increase of €395.1 million, which outweighed the increase in expenditure of €268.2 million, resulting in a positive change in the Government’s Consolidated Fund of €126.9 million. During the period under review, recurrent revenue was recorded at €3,387.2 million, up from €2,992.1 million recorded in 2013.

The major contributors to the comparative increase of 13.2% were higher proceeds from Customs and Excise Duties (€124.2 million), Income Tax (€100.4 million), Social Security (€53.9 million) and Value Added Tax (€52.5 million).

Compared to 2013, higher spending was registered on recurrent and capital expenditures and interest payments resulting in an increase in total expenditure of €268.2 million. Recurrent expenditure went up by €224.4 million, totalling €2,857.1 million. The main contributor to this increase was higher spending on Programmes and Initiatives by €130.5 million. The major increases registered in the Programmes and Initiatives category were recorded in social security benefits (€38.5 million), the social security state contribution, which also feature as revenue (€17.8 million), medicines and surgical materials (€10.4 million), the contribution towards church schools (€5.6 million) and child care for all (€5.3 million), among others. Moreover, increases were also registered in Personal Emoluments (€50.3 million), Contributions to Government Entities (€32.5 million) and Operational and Maintenance Expenses (€11.1 million).

The interest component of the public debt servicing costs for 2014 increased to €231.1 million from €227.9 million the previous year. In addition, Government’s Capital Expenditure for 2014 stood at €435.3 million, from €394.7 million in 2013. The increase of €40.6 million was mainly brought about by added outlays on EU funded capital projects mainly road works, the procurement of a helicopter and the integrated flood relief project. Conversely, a lower equity injection to the national air carrier was registered.

At the end of December 2014, Central Government Debt stood at €5,129.6 million, up by €149.6 million, over 2013. This was the result of higher Malta Government Stocks, which increased by €288.7 million. On the other hand, Treasury Bills and Foreign Loans went down by €107.7 million and €10.6 million respectively.

As a result of consolidation, higher holdings by government funds in Malta Government Stocks resulted in a reduction in debt of €25.9 million. The Euro coins issued in the name of the Treasury went up by €5.1 million when compared to the coin stock as at the end of December 2013, and totalled €60.4 million.

“The deficit has narrowed because the government has injected a sense of dynamism into the economy, contributing to a record level of optimism in the country,” the Finance Ministry said in a statement. “Thanks to this government’s projects, jobs have increased at a higher rate than they had in the final five years under the previous administration, and unemployment is at a historic low. This has resulted in an increase in government income that has made good for the heavy increase in public investment.”