On track for budget surplus by 2010

The structural deficit for 2006 stood at Lm58 million or 2.7 per cent of GDP (gross domestic product), which was better than the 3 per cent predicted in last year's budget speech. This year's deficit is predicted to fall to Lm48 million or 2.1 per cent...

The structural deficit for 2006 stood at Lm58 million or 2.7 per cent of GDP (gross domestic product), which was better than the 3 per cent predicted in last year's budget speech. This year's deficit is predicted to fall to Lm48 million or 2.1 per cent of GDP and Lm10 million less than last year's.

The deficit is planned to fall to 1.2 per cent of GDP, or Lm29 million, in 2008 and the government is committed to ending up with a surplus by 2010, releasing greater resources for economic investment in the country and improving the situation of families.

The government is projecting an income of about Lm58 million more in 2008 than this year, due to higher employment and more investment.

The government estimates that its recurrent expenditure this year will have increased by Lm28 million. The greatest rises were on pensions and social services (up by Lm1 million per month), education (Lm4 million) and health (Lm5 million).

Next year, recurrent expenditure will rise by Lm29 million, of which Lm20 million will be in pensions and social benefits. Health services are expected to increase by Lm6 million and the only government entities to receive increases in expenditure will be the Malta College for Arts, Science and Technology and the University. This year there were big increases in capital expenditure in education, the environment and agriculture, and some Lm41 million were spent in connection with projects financed by the Fifth Italian Protocol and others co-financed by the EU.

Still, the government is expected to spend Lm6 million less this year than it did in 2006 mainly because last year it spent Lm12 million on the Mater Dei Hospital.

In 2008, the government is estimating it will spend Lm10 million more than this year despite spending Lm14 million less in capital linked to the new hospital.

Expenditure highlights

Education:
Lm102 million (+Lm9 million)

Tourism:
Lm10.5 million (+Lm2.5 million) for the Malta Tourism Authority
Lm5 million for product development

Social solidarity and health:
Lm400 million (+Lm26 million)

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