Deficit soars to €271m

The government deficit soared to €271 this November, €71 million more than the Finance Minister has projected for the end of the year.

Originally, the government planned to end the year with a deficit of €68.4 million or 1.2 per cent of the Gross Domestic Product. However, in his November budget speech, Finance Minister Tonio Fenech revised the figure upwards to €200 million.

Last month, when reacting to October's official figures, which showed that the government's plans had already been derailed when compared to the revised target by €43 million, Mr Fenech said he expected to reduce the gap by the end of the year.

He had blamed the derailment on unforeseen extraordinary expenditure on fuel costs and the Malta Shipyards' early retirement schemes.

However, the latest figures released by the National Statistics Office show that the gap widened further when compared to October.

Still, when this point was brought to the attention of the minister, a spokesman said the government would stick to its targets, pointing out that it is expecting substantial income tax revenues in December.

"The government will meet its projections as set in October," the spokesman said, putting one proviso, which had already been mentioned by the Prime Minister a few weeks ago. "We may have higher subsidies to Enemalta to cover postponement of meter energy charges to January 2009 rather than October 2008 - this is expected to cost about €3 million," the spokesman said.

Recurrent expenditure totalled just over €1.8 billion, an increase of €162.4 million compared to the first 11 months last year. Significant increases in recurrent expenditure were recorded under social security benefits (+€47.9 million), under the Ministry of Health, the Elderly and Community Care (+€28.5 million) and under the Ministry for Investment, Industry and Information Technology (+€25.3 million).

In the period under review, payment of interest on public debt increased by €10.1 million when compared to last year, reaching €181.1 million.

At the same time, capital expenditure for the first 11 months this year declined by €13.1 million and amounted to €194.5 million. However, there were increases in the spend of the Health Ministry (€12.2million) and the Environment Ministry (€10.2 million).

The government's debt outstanding at the end of November amounted to €3,520.8 million, an increase of €205.6 million compared to the gross government debt outstanding at the end of November last year.

Long-term borrowing grew by €201.1 million while short-term and foreign borrowing declined by €20.5 million and by €5.3 million respectively.