Government deficit continues to grow

The shortfall between the government's recurrent revenue and total expenditure in the first eight months of the year amounted to €260.4 million, an increase of €96.2 million when compared to the same period last year, the NSO said yesterday.

It was announced last month that the government's financial deficit in the first seven months of the year had widened by €74.6 million compared to the same period last year.

The NSO said an increase of €144.1 million in total expenditure was partly offset by an increase of €47.9 million in recurrent revenue.

In the first eight months of this year, the Consolidated Fund recorded increases in revenue of €30.7 million and €24.6 million from income tax and VAT respectively.

Social security contributions added €20 million but revenue from licences and fines declined by €9.1 million while revenue classified under miscellaneous receipts dropped by €8.9 million, essentially because of lower proceeds from sale of Malta Government Stocks by auction.

Recurrent expenditure amounted to €1,356.3 million, an increase of €146.1 million compared to the first eight months last year. Significant increases in recurrent expenditure were recorded under social security benefits (+€37.8 million), the Ministry of Health, the Elderly and Community Care (+€35.8 million) and under the Ministry for Investment, Industry and Information Technology (+€20.7 million).

During the period under review, the interest component of the public debt servicing costs amounted to €128.9 million, up by €7.2 million over 2007.

The capital programme for the first eight months this year declined by €9.1 million and amounted to €144.9 million.

Loans taken up by the government and transferred to the Consolidated Fund in the first eight months amounted to €232.7 million, of which €93.2 million were on account of matured stock.

The central government debt outstanding at the end of August amounted to €3,521.4 million, an increase of €256.8 million compared to the gross central government debt outstanding at the end of August last year. Long-term and short-term borrowing increased by €206.7 million and by €27.3 million respectively while foreign borrowing dropped by €6.2 million.