The shortfall between the central government's recurrent revenue and total expenditure in the first nine months of this year narrowed by €111.3 million, the National Statistics Office said.

It said that the increase in recurrent revenue of €135.3 million outweighed the rise in expenditure of €24 million, resulting in an improvement in the government deficit when compared to the corresponding period last year.

During the first three quarters this year, recurrent revenue stood at €1,822.1 million, up by eight per cent over last year.

Higher returns were mainly registered from value added tax (+€55.3 million), customs and excise duties (+€30.8 million), social security (+€22.4 million) and rants (+€20.8 million).

Conversely, a reduction in proceeds was recorded from income tax (-€3.8 million).

Total expenditure was recorded at €2,010.6 million, up from €1,986.6 million when compared to last year. This was the result of higher outlays on recurrent expenditure and interest payments. Capital expenditure declined substantially.

The main contributors to the increase of €32.6 million in recurrent expenditure were, among others, contributions to government entities (+€9.3 million), personal emoluments (+€8.2 million), medicines and surgical materials (+€7.4 million), social security state contribution (+€5.8 million), an administration fee to Transport Malta (+€4.2 million) and public service obligations (+€3.6 million).

Lower outlays were registered on social security benefits (-€8.5 million).

Capital expenditure was recorded at €183.4 million, a 12.5 per cent decline from last year.

The lower expenditure on capital projects, by €26.2 million, was mainly due to the completion of the Malta South Sewage Infrastructure.

This was partly offset by an increase in the EU Agricultural Fund for Rural Development (+€3.1 million).

The interest component of the public debt servicing costs for the period under review went up by €17.6 million and reached €159.5 million.

At the end of September 2011, central government debt stood at €4,368.2 million, up by €175.9 million, or 4.2 per cent, over the corresponding period last year.

This was the result of higher long-term borrowing, which added €340.7 million. Short-term securities and foreign borrowing decreased by €155 million and €13.4 million, respectively.