Government deficit exceeds €1 billion in first eight months

Between January and August 2020, the Government’s Consolidated Fund reported a deficit of €1,086.2 million, the National Statistics Office (NSO) has said.

By the end of August 2020, recurrent revenue amounted to €2,524.8 million, 20.9% lower than the €3,190.2 million reported in revenue up to the end of August 2019. Income Tax exhibited the largest decrease at €235.3 million.

Between January and August 2020, total expenditure amounted to €3,611.1 million, 16.3% higher than the corresponding period in 2019. During the period under review, recurrent expenditure totalled €2,965.1 million, a rise of €298.4 million when compared to the €2,666.8 million reported in 2019, the NSO said. “The main contributor to this increase was a €135.3 million rise reported under Programmes and Initiatives.”

The difference between total revenue and expenditure resulted in a deficit of €1,086.2 million being reported in the Government’s Consolidated Fund by the end of August 2020. This represented an increase in deficit of €1,170.1 million when compared to the surplus of €83.9 million witnessed during the same period in 2019. “This difference mirrors an increase in total expenditure, consisting of recurrent expenditure (€298.4 million), interest (€5.2 million) and capital expenditure (€211.6 million), in addition to a drop in recurrent revenue (€665.3 million).””

Decreases in revenue and increases in expenditure reflect developments related to COVID-19, the NSO said.

“At the end of August 2020, Central Government debt stood at €6,599.1 million, a €1,179.7 million rise from the previous year. Increases reported under Malta Government Stocks (€587.3 million) and Treasury Bills (€502.7 million) were the main reasons for the rise in debt. Higher debt was also reported under the 62+ Malta Government Savings Bond (€91.5 million) and Euro coins issued in the name of the Treasury (€2.9 million). In contrast, lower debt was registered under Foreign Loans (€0.1 million). Higher holdings by government funds in Malta Government Stocks also resulted in a decrease in debt of €4.6 million.”