UPDATED 13:44 Finance Ministry hails economic results

Malta’s government deficit fell by half a percentage point to reach 1.5 per cent of GDP last year, new figures released by the National Statistics Office have shown.

The deficit fell by €34.4 million to reach €129 million by the end of 2015.

Government debt rose by €198.8 million from 2014 but declined as a percentage of GDP. While in 2014 Malta’s debt stood at 67.1 per cent of GDP, by the end of last year that figure had declined to 63.9 per cent. By the end of 2015, nominal gross consolidated debt amounted to €5,620.7 million.

In a reaction to the data, the Finance Ministry recalled that the deficit stood at 3.5 per cent in 2012 - above the Maastricht criteria set by the EU. 

"The data shows that over the last three years the Government managed to reduce the deficit amount by almost half, as the deficit fell to €129 million in 2015, from €256 million in 2012," a ministry statement noted. 

To arrive at the government sector’s deficit for 2015, adjustments were
made to the balance of its consolidated fund, which amounted to a deficit
of €232.8 million. Among the major positive adjustments were other accounts receivable and payable (€107.9 million) and the treasury clearance fund (€55.5 million).

The government’s €43 million equity injection into Air Malta proved to be the biggest drag on the consolidated fund, followed by the adjustment of stock premium proceeds (€8.8 million), the net borrowing of Extra Budgetary Units (€6.8 million) and time-adjusted cash transactions (€3.8 million).

Definitive figures for the 2012-2015 period also showed that the government deficit was marginally lower in each year than originally believed. The deficit was revised down by €1.2 million in 2012, €0.6 million in 2013 and €5.2 million in 2014. Government debt figures were marginally revised upwards by €0.2 million and €0.4 million for 2013 and 2014 respectively.

A positive stock flow adjustment of 0.8 per cent meant that debt in 2015 increased more than implied by the deficit. The positive stock flow adjustment was due to a higher other accounts receivable and payable mainly on account of higher EU funds receivable which positively impacted the deficit.

Conversely, this increase was partly outweighed by lower loans, currency and
deposits and equity and investment fund shares, the NSO said. 

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