The shortfall between the government's recurrent revenue and total expenditure in the first seven months this year amounted to €238.2 million, down by €83.9 million when compared to the same period last year, the National Statistics Office said.

It said that in January-July 2011, recurrent revenue increased by €73.9 million, while total expenditure registered a decline of €9.9 million, resulting in an improvement in the government deficit when compared to the corresponding period last year.

During the period under review, recurrent revenue stood at €1,325 million, up by 5.9 per cent over last year.

The major increases were registered in customs and excise duties (+€29.6 million), grants (+€19.1 million), social security (+€17.4 million) and value added tax (+€16 million).

Conversely, a reduction in proceeds was recorded from income tax (-€8.2 million).

Total expenditure stood at €1,563.2 million, down by €9.9 million when compared to the first seven months last year, as a result of lower outlays on capital expenditure.

On the other hand, interest payments and recurrent expenditure recorded increases.

The increase of €6.5 million in recurrent expenditure was driven by higher spending on state contribution (+€7.2 million), personal emoluments (+€6.5 million), public service obligations (+€4.3 million) and medicines and surgical materials (+€3.8 million).

These were partly eclipsed by lower outlays on social security benefits (-€10 million) and contributions to government entities (-€6.1 million).

Capital expenditure was recorded at €139.6 million, down from €163.2 million last year.

The lower capital expenditure occurred as a result of the completion of the Malta South Sewage Infrastructure.

The interest component of the public debt servicing costs for the period under review increased by €7.2 million to €124 million.

At the end of July, central government debt stood at €4,425.1 million, up by €296.2 million, or 7.2 per cent, over the corresponding period last year.

This was the result of higher long-term borrowing, which added €554.8 million.

On the other hand, short-term securities and foreign borrowing decreased by €250.3 million and €13.2 million respectively.

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