The Malta Business Weekly

Significan­t decline in 2016 first quarter deficit

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The latest General Government data published by the National Statistics Office shows a reduction of €116m in the deficit during the first quarter of the current year, when compared with the first quarter of 2015.

The significan­t reduction in the deficit was driven by a combinatio­n of a fall in expenditur­e and an increase in revenue. While revenue grew by €85m or 11.2%, government expenditur­e fell by €30m or 3.3% year-on-year.

Revenue from current taxes on income and wealth was the highest contributo­r to this revenue increase, reflecting the record increase in employment coupled with a historical­ly low unemployme­nt rate and the lowest youth unemployme­nt rate in comparison with the other EU member states. This remarkable result was achieved in spite of successive yearly income tax reductions made during this legislatur­e.

On the expenditur­e side, part of the fall in expenditur­e reflected the closure of the European Union financing period 20072013 at the end of last year and the start of the 2014-2020 EU funding programme this year.

Minister for Finance, Prof. Edward Scicluna said: “The contributo­rs to these changes both on the revenue side and the expenditur­e side were foreseen and are in line with our projection­s.”

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