Malta: Deficit narrows as pandemic assistance is scaled back

Malta’s deficit narrowed in the first two months of the year, as assistance related to the pandemic was scaled back. The difference between total revenue and expenditure resulted in a deficit of €80.7 million being reported in the Government’s Consolidated Fund at the end of February 2022. Compared to the same period in 2021, there was a decrease in deficit of €247.0 million.

Debt on the other hand continued to increase. By the end of February 2022, Central Government debt stood at €8,393.9 million, a €1,227.2 million rise from 2021.

NSO data published on Friday has shown that in the first two months of 2022, Recurrent Revenue amounted to €797.5 million, 13.8 per cent higher than the €701.0 million reported a year earlier, the NSO reported on Friday. The largest increase was recorded under Income Tax (€39.9 million), Grants (€25.5 million), Social Security (€18.2 million), Customs and Excise Duties (€7.3 million).

On the other hand, total expenditure stood at €878.2 million, 14.6 per cent lower than the previous year. During the reference period, Recurrent Expenditure totalled €802.4 million, a decrease of €111.7 million in comparison to the €914.1 million reported by the end of February 2021. The main contributor to this drop was a €52.6 million decrease reported under Programmes and Initiatives. F

The decrease in the Programmes and Initiatives category was mainly the result of lower Pandemic assistance schemes (€33.0 million) and EU own resources (€16.6 million).

The interest component of the public debt servicing costs totalled €23.1 million, a decrease of €7.3 million when compared to the previous year. By the end of February 2022, Government’s capital spending amounted to €52.6 million, €31.5 million lower
than 2021. This drop resulted from a reduction in expenditure towards Investment incentives (€12.5 million),
Acquisition of property for public purposes (€6.0 million), Road construction and improvements (€5.0 million),
Gozo Aquatic Centre (€3.5 million), Distribution centre at Ricasoli Smart City (€2.5 million) and Property, plant
and equipment (€2.3 million).

This difference mirrors an increase in total Recurrent Revenue (€96.5 million), coupled with a decrease in total expenditure, which consists of Recurrent Expenditure (€111.7 million), Capital Expenditure (€31.5 million) and Interest (€7.3 million).