Increased spending on social services, Air Malta, widens government deficit
The government's deficit widened by €83.6 million in the first five months of this year, official figures showed today.
The he shortfall between the government's recurrent revenue and total expenditure amounted to €234.4 million, an increase of €83.6 million compared to the corresponding period in 2011, the National Statistics Office said.
An increase in recurrent revenue of €27.2 million was outweighed by a rise in
total expenditure of €110.8 million.
During January-May 2012, recurrent revenue stood at €1,008.0 million, a rise of 2.8 per cent over last year. The main contributors were Income Tax (+€42.1 million), Social Security (+€13.6 million) and Value Added Tax (+€9.6 million).
These were partly offset by a decline in revenue from Grants (-€18.0 million), Miscellaneous Receipts (-€10.5 million), Customs and Excise Duties (-€7.6 million) and the Central Bank of Malta (-€6.0 million).
Compared to the corresponding period in 2011, total expenditure was recorded at €1,242.4 million, up by 9.8 per cent, as a result of higher outlays on all expenditure components.
Recurrent expenditure increased by €92.1 million, mainly due to higher outlays on Programmes and Initiatives by €68.2 million. This was the result of added social security benefits (+€22.7 million), medicines and surgical materials (+€8.1 million), EU own resources (+€8.0 million), assistance to help the elderly live independently (+€3.5 million), social security state contributions(+€2.8 million), which also feature as revenue, and electoral activities (+€2.1 million).
An increase in expenditure was also recorded in Operational and Maintenance Expenditure (+€11.1 million),Personal Emoluments (+€7.6 million) and Contributions to Government Entities (+€5.1 million).
In addition, Government's Capital Expenditure for the period under review reached €124.3 million.
The comparative increase of €14.8 million was mainly the result of an equity injection of €20.0 million to the national air carrier and an increase in EU funds related to the Ministry for Infrastructure,Transport and Communication (+€6.9 million). These were partly outweighed by a contribution towards the treasury clearance fund of €11.0 million in 2011, which was not repeated during the
period under review.
Moreover, during January-May 2012, the interest component of the public debt servicing costs recorded an increase of €3.9 million.
At the end of May Central Government debt stood at €4,625.5 million, up by
€179.4 million, or 4.0 per cent, over the corresponding period last year. This increase was the result of higher long-term borrowing, which added €328.6 million.
On the other hand, short-term securities and foreign borrowing declined by €92.1 million and €13.6 million respectively. Moreover, as a result of consolidation, higher holdings by government funds in MGSs resulted in a reduction of €48.0 million in Government Debt.
The euro coins issued in the name of the Maltese Treasury went up by €4.5 million when compared to the coin stock as at the end of May 2011, and totalled €46.3 million.