Government deficit upwards of €600 million by end of April 2020

29th May 2020

Government’s capital spending increased by €77.4 million from 2019, largely due to additional spending towards investment incentives, including €50 million on the COVID-19 Wage Supplement.

According to the latest figures released by the National Statistics Office (NSO), the Government’s Consolidated Fund reported a deficit of €607.1 million by the end of April 2020.

Between January and April 2020, recurrent revenue fell by €220.1 million and totalled €1,167.6 million. This reflects a 15.9 per cent decline from the €1,387.7 million reported in revenue by the end of April 2019, according to the report.

A €109.0 million drop in Income Tax proved to be the main catalyst behind the decline in revenue. Further drops were also witnessed under Value Added Tax (€31.9 million), Licences, Taxes and Fines (€25.4 million), Customs and Excise Duties (€24.0 million), Grants (€23.5 million), Social Security (€22.0 million), Fees of Offi ce (€9.2 million) and Reimbursements (€5.2 million). In contrast, higher revenue was registered under Miscellaneous Receipts and Dividends on Investment.

By the end of April 2020, total expenditure amounted to €1,774.7 million, a 15.9 per cent increase from the corresponding period in 2019.

Recurrent expenditure totalled €1,491.2 million, a €170.1 million increase from the €1,321.1 million recorded by the end of April 2019. The main contributor to this increase was a €120.2 million rise reported under Programmes and Initiatives. Furthermore, rises in outlay were also registered in Contributions to Government Entities (€50.9 million) and Personal Emoluments (€4.7 million), while Operational and Maintenance Expenses declined by €5.7 million.

The main developments in the Programmes and Initiatives category involved added outlays towards social security benefits (€60.9 million, of which €5.2 million was spent on COVID-19 benefi ts), medicines and surgical materials (€23.2 million), church schools (€19.6 million), solid waste management strategy (€5.7 million), compensation payments (€5.2 million), street lighting (€4.9 million), extension of the school transport network (€4.7 million), EU own resources and feed-in-tariff (both €4.3 million).  

Drops were reported in the tax relief measure (€11.4 million) and the state contribution (€9.6 million, also reported as revenue).

The interest component of the public debt servicing costs totalled €61.7 million, a €4.4 million drop from the same period in 2019.

Government’s capital spending amounted to €221.8 million by the end of April, an increase of €77.4 million from 2019. The rise was largely due to additional spending towards investment incentives (€55.2million) which amounted to €73.0 million, including €50 million spent in relation to the COVID-19 Wage Supplement.  

Other increases were recorded in road construction and improvements (€16.0 million), property, plant and equipment (€11.3 million), the EU agricultural fund for rural development 2014-2020 (€6.8 million) and the ICT core services agreement (€3.0 million). On the other hand, there was a drop reported under EU internal security fund - borders and visa (€14.4 million). 

The difference between total revenue and expenditure resulted in a deficit of €607.1 million being reported in the Government’s Consolidated Fund by the end of April 2020. This represented an increase in the deficit of €463.2 million when compared to the deficit of €144.0 million witnessed during the same period in 2019. This difference mirrors an increase in total expenditure, consisting of recurrent expenditure (€170.1 million), interest (-€4.4 million) and capital expenditure (€77.4 million), in addition to a drop in recurrent revenue (€220.1 million). Decreases in revenue and increases in expenditure reflect developments related to COVID-19. 

By the end of April 2020, Central Government debt stood at €5,936.4 million, a €433.4 million rise from April 2019. This was primarily the result of a €320.2 million increase exhibited under Treasury Bills, as well as higher debt reported under Malta Government Stocks (€119.1 million) and Euro Coins issued in the name of the Treasury (€4.6 million). In contrast, there were drops in debt registered under the 62+ Malta Government Savings Bond and Foreign Loans. Higher holdings by government funds in Malta Government Stocks also resulted in a decrease in debt of €7.3 million.

 


30th May 2020

Malta Chamber of Commerce President David Xuereb made his remarks in the May edition of The Malta Bu...

29th May 2020

“We expect demand to build slowly, only returning to 2019 levels in about three years' time,” sa...

28th May 2020

‘Even though the company was negatively affected by the pandemic outbreak, we did not cut back on vo...

26th May 2020

Lufthansa’s Germanwings was grounded in April due to the Coronavirus pandemic