Saturday, 30th August 2008
Deficit balloons as government sticks to its projections
Government spent more on interest on loans
to service debtThe government's budget deficit in the first seven months of this year is a staggering 36 per cent higher than the deficit for the same period last year, growing from €209 million to around €283 million, figures released by the National Statistics Office (NSO) yesterday reveal.
The troubling statistic comes in the wake of a declaration made earlier this month by Finance Minister Tonio Fenech, that the government's financial position was "slightly off target". However, the data released yesterday suggest it may not be so easy to brush aside the difference.
The Prime Minister (who was then also Minister for Finance) set out in his budget speech last November to end 2008 with a deficit of some €68 million. On this basis, Lawrence Gonzi had announced the government was aiming at achieving a budget surplus by 2010.
Asked how the NSO figures compared with the government's half-yearly projections, the Finance Ministry would not give a figure. "To be able to comment about the whole picture, we must wait until the end of the year to have annual figures..." a spokes-man for the ministry said, adding that the government is sticking to its projections.
In the remaining five months the government usually rakes in more revenue than it does until end July on a month-by-month basis.
Despite registering a deficit of around €208 million by July 2007, that year in fact ended with a deficit of just under €115 million, roughly as targeted.
Still, the gap to be bridged this year is substantially greater, almost double: €171 million between last month and the end of the year as opposed to €93 million for the same span last year.
The NSO said that an increase of €131.1 million in total expenditure was only partly offset by an increase of €56.5 million in recurrent revenue.
The widening deficit means the government spent more on interest on loans taken out to service the debt. About €106 million were borrowed during the period under review, pushing public debt servicing costs up to €108 million - a comparative increase of €4.7 million over 2007.
The Consolidated Fund recorded an increase of €26.7 million from income tax and of €24.4 million from VAT while social security contributions also increased by €15.1 million, but revenue from licences, taxes and fines is down by €7.3 million.
Overall, recurrent expenditure stood at €1,204.2 million, an increase of €129.1 million compared to the same period last year. Major increases in recurrent expenditure were recorded under social security benefits, which added €35.1 million, along with surges in the budget spend of the health and the IT ministries, which went up by €29.9 million and €12.3 million respectively.
The total government debt outstanding at the end of July amounted to €3,486.9 million, an increase of €159.6 million compared to the gross Central Government debt outstanding at the end of July last year. While long-term borrowing increased by €149.3 million, short-term borrowing and foreign borrowing declined by €11.2 million and €6.3 million respectively.
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Comments
You are quite right P Scicluna, but the fact that no one knew or knows what went wrong in the economy is also the opposition's fault.
One hopes that Dr. Joe Muscat is reading these messages and start explaining to the public the REAL problems that we have had these last 15 years in the economy.
Labour was pathetic in it's approach regarding the economy. Labour thought that the misery that people were feeling after 17 years of economic mismanagement was sufficient to win the election, but PN went out finding every voter and DECEIVED as best they could.
One is now expecting Dr. Joe Muscat to start explaining in a clear simple way so that every man and woman understands the biblical problems, that PN have inflicted in our economy, especially the Government finances.
The Government is now in a situation where it has to actually borrow more then the sum to service the National Debt, EVERY YEAR and counting!
Any expert to give us a preview of the coming budget?
Kull ma ghandna, huwa kollu dejn!
Where are those PN apologists to explain this miserable financial situation by your own INCOMPETENT regime?
Oh, and please do not mention the oil price and food prices from abroad. This is the Government's finances, and not our own pockets becoming smaller by the day because of the highest INFLATION amongst the other EU countries!
Come on CHICKENS, where are you?
What's the excuse for yet another HORRIBLE budget coming our way?.
What a bunch of hypocrites!
Let one remind you of what PN stand for:-
They promise a lot, they deliver very little, and when things go wrong, there is always a plausible excuse for their failures!
Enjoy, and taste the difference!
Just giive us the facts and tell us where our hard earned tax contributions where squandered?
Could Clyde Puli's extended holiday in China and other 'offical joy rides' so far unknown to the taxpayer have a bearing on this?
WE MUST HAVE AN EXPLANATION!!!
I think that Malta and its coffers are doing very well financially... just like almost every business on the islands.
The only financial crisis I see belongs to workers who everyday see their purchasing power eroding further.
GonziPN's track record is becoming worst by the day with his "par idejn sodi"
and who will suffer after all?? us tax payers.
Surplus by 2010 ......... the funniest joke ever said by GONZIIIIII!!!!!
Minister Tonio Fenech "slightly off target" - (no comment) :):):):):)
Gonzi anticipated that Labour would surely win the election and planned to completely destroy and make a bigger mess of the Government finances just before the election, in the hope that Labour would be blamed for the massive DISASTER.
Remember 1996, when we had millions in unpaid bills due to suppliers of medicine from abroad?
Guess what though!
Labour voters are elated to this news, as it is now GONZI and those Par Idejn Sodi that had to lump it and show us how to manage their own mismanagement due to gross INCOMPETENCE and deceit.
Taste the difference !!
would not achieve to make surplus in the country's finance as promised by our PM?
Comparing to the ship yards saga we can give the Goverment an early retirement scheme or
privatise him!