Consumption fuels 8.4% in revenue, income tax revenue down €25 million

In the first quarter, recurrent revenue increased by €37.7 million, whereas the rise in total expenditure amounted to €3.3 million, resulting in a drop in government deficit, compared to the corresponding quarter last year.

During the period under review, recurrent revenue stood at €489.3 million, up by 8.4 per cent over last year. The main contributors were VAT (+€21 million), customs and excise (+€12.7 million) and social security (+€11.4 million). Conversely, a decline was recorded in proceeds from income tax (-€25.1 million).

Total expenditure stood at €677.4 million when compared to the first three months last year. This 0.5 per cent increase resulting from higher outlays on interest payments and capital expenditure, was outweighed by a fall in recurrent expenditure.

The decline of €11.2 million in recurrent expenditure was driven by lower social security benefits and contributions to government entities, by €17.8 million and €10.3 million respectively. These were partially outweighed by higher allocation to local councils (+€7.5 million), additional expenditure on medicines and surgical materials (+€4.3 million) and street lighting (+€4.0 million).

Capital expenditure went up by €6.2 million. This was triggered by increases of €4.4 million under the External Borders Fund and €4.0 million on PC leasing. On the other hand, road construction expenditure registered a decrease of €1.2 million.

Concurrently, the interest component of the public debt servicing costs for the period under review rose by €8.3 million.

At the end of March government debt stood at €4,315.1 million, up by €329.9 million, or 8.3 per cent over the corresponding period last year. This was the result of higher long-term borrowing, which added €455.9 million. On the other hand, short-term securities and foreign borrowing declined by €118.0 million and €13.1 million respectively.

The euro coins issued in the name of the Maltese Treasury went up by €3.8 million when compared to the coin stock as at the end of March 2010, and totalled €40.7 million.

Euro area annual inflation is expected to be 2.8% in April 2011 according to a flash estimate issued by Eurostat, the statistical office of the European Union. It was 2.7% in March.