Con­sis­tent progress for Malta’s pub­lic fi­nances

The Malta Business Weekly - - NEWS -

Two NSO re­leases con­firm the con­sis­tent progress be­ing made with re­gards to Malta’s pub­lic fi­nances.

The first re­lease con­firms that the Gov­ern­ment achieved its deficit tar­get for 2014, 2.1%, and also that na­tional debt fell to 68.3% of GDP, from 69.6% a year ear­lier.

The sec­ond re­lease shows that dur­ing the sec­ond quar­ter of 2015, growth-friendly fis­cal con­sol­i­da­tion con­tin­ued to progress. The Quar­terly Ac­counts for the Gen­eral Gov­ern­ment show the deficit dur­ing April – June 2015 stand­ing at €47 mil­lion, sig­nif­i­cantly lower than in the cor­re­spond­ing pe­riod in 2014 (€72 mil­lion).

This im­prove­ment was driven by a very healthy in­crease in rev­enue from in­come taxes, which rose by €40 mil­lion de­spite a fur­ther re­duc­tion in tax rates. This pos­i­tive re­sult re­flects the pos­i­tive im­pact of higher eco­nomic ac­tiv­ity on gov­ern­ment rev­enue. On the other hand, in­creased ef­forts to im­prove pub­lic health and ed­u­ca­tion ser­vices un­der­pins the rise in gov­ern­ment ex­pen­di­ture. Dur­ing the sec­ond quar­ter of 2015, there was also a very sig­nif­i­cant rise in cap­i­tal in­vest­ment, which at €83 mil­lion was 26% higher than in the cor­re­spond­ing pe­riod of 2014.

Fig­ures also show that the debt in June 2015 rep­re­sents a de­cline of €100 mil­lion over the same quar­ter of 2014. This points to­wards a cor­re­spond­ing fall in the debt ra­tio, al­though this needs to be con­firmed in a forth­com­ing Euro­stat re­lease.

Min­is­ter for Fi­nance, Prof. Sci­cluna re­marked that; “The of­fi­cial re­ports on the progress of our pub­lic fi­nances are con­firm­ing that while the fis­cal con­sol­i­da­tion is still on track, this is not be­ing ac­com­plished at the cost of eco­nomic growth”.

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