Deficit shortfall down by €97.5 million in first half of 2011

In January-June 2011, recurrent revenue increased by €82.8 million, while total expenditure registered a decline of €14.7 million, resulting in an improvement in the government deficit when compared to the corresponding period last year.

During the period under review, recurrent revenue stood at €1,140.6 million, up by 7.8 per cent over last year. The major increases were registered in Customs and Excise duties (+€31.4 million), Value Added Tax (+€22.0 million), and Social Security (+€21.9 million).

Conversely, a reduction in proceeds was recorded from Income Tax (-€8.1 million).

Total expenditure stood at €1,330.8 million, down by €14.7 million when compared to the first six months last year, as a result of lower outlays on capital and recurrent expenditures. Interest payments recorded an increase.

The decline of €3.1 million in recurrent expenditure was driven by lower contributions to government entities and social security benefits, by €19.1 million and €11.7 million respectively. These were partially outweighed by increases in the State Contribution (+€6.7 million), public service obligations (+€4.2 million), medicines and surgical materials (+€4.2 million), an administrative fee to Transport Malta (+€3.4 million), contribution to church schools (+€2.3 million) and Electoral Commission activities (+€1.5 million). More spending was also registered in personal emoluments by €5.9 million.

Capital expenditure was recorded at €121.9 million from €139.8 million registered last year. The lower expenditure on capital projects by €17.9 million was triggered by the completion of the Malta South Sewage Infrastructure. Increases in capital expenditure include the EU Agricultural Fund for Rural Development (+€3.8 million) and the ICT Core Services Agreement (+€2.4 million).

The interest component of the public debt servicing costs for the period under review increased by €6.3 million and reached €104.7 million.

At the end of June 2011, Central Government debt stood at €4,433.5 million, up by €329.2 million, or 8.0 per cent, over the corresponding period last year. This was the result of higher long-term borrowing, which added €553.6 million. On the other hand, short-term securities and foreign borrowing decreased by €215.5 million and €13.3 million respectively. The euro coins issued in the name of the Maltese Treasury went up by €3.7 million when compared to the Euro coin stock as at the end of June 2010, and totalled €42.6 million.