Malta: Deficit narrows as pandemic assistance is scaled back

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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).

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