Malta was one of only two EU member states which saw a drop in their deficit in 2009, the year of the global recession. According to data published in Brussels by Eurostat this week, all the other 25 EU member states registered a significant deterioration in their deficits, primarily as a result of the bumpy global economic downturn.
According to Eurostat's first notification of the state of public finances in the EU member states for 2009, at the end the year Malta's deficit was €37 million below that for 2008. This means that between January and December 2009, when Malta's GDP took a downturn, the island still managed to cut its deficit from 4.5 per cent at the end of 2008 to 3.8 per cent at the end of 2009.
Eurostat said Malta's deficit at the end of last year stood at -€218 million against -€255 million in 2008.
The European Commission last year launched an excessive deficit procedure (EDP) against Malta following the 2008 negative results, when the country surpassed the EU's benchmarks just a year after joining the euro zone. As a result, the government was obliged to follow a rigid timetable to bring its deficit back in line with EU thresholds by the end of this year.
On the other hand, debt levels continued to increase last year reaching €3.94 billion, a substantial increase of 5.4 per cent over 2008. While the debt ratio compared to GDP in 2008 stood at 63.7 per cent, it shot up to 69.1 last year. The country's economy produced a GDP of €5.7 billion in 2009, with government expenditure increasing slightly from 44.3 per cent in 2008 to 44.8 per cent of GDP in 2009. Revenue dropped from 40.5 to 40.3 per cent of GDP.
Though Malta's state of public finances in 2009 cannot be considered to be rosy, the country is in much better shape than most other EU member states, including the 16-member euro area.
The average deficit in the euro area shot up from two per cent in 2008 to 6.3 per cent in 2009 (+4.3 per cent) while average debt stood at 78.7 per cent, +8.3 per cent more than in the previous year. On a country by country basis, Malta's deficit at the end of 2009 was one of the lowest among the 27 EU member states.
Eurostat said that in 2009 the largest government deficits as a percentage of GDP were recorded by Ireland (-14.3 per cent), Greece (-13.6 per cent) the United Kingdom (-11.5 per cent), Spain (-11.2 per cent), Portugal (-9.4 per cent), Latvia (minus nine per cent), Lithuania (-8.9 per cent), Romania (-8.3 per cent), France (-7.5 per cent) and Poland (-7.1 per cent).
No member state registered a government surplus in 2009.
The lowest deficits were recorded by Sweden (-0.5 per cent), Luxembourg (-0.7 per cent) and Estonia (-1.7 per cent).
In all, 25 member states recorded a worsening in their government balance relative to GDP in 2009 compared with 2008 and only two, Estonia and Malta, recorded an improvement.