Government’s total expenditure increased at a higher rate than recurrent revenue over the first five months of the year, creating a €78 million deficit in the Consolidated Fund.
Despite that deficit, government debt in May was €209.4 million lower than it was 12 months before, and stood at €5,386.2 million at the end of that month.
The interest component of the public debt servicing costs stood at €85.2 million, down from €89.6 million last year.
Recurrent expenditure stood at €1,439.5 million from €1,353.7 million last year. The main contributors to this increase were Programmes and Initiatives and Personal Emoluments with a rise of €47.3 million and €26.8 million respectively.
The main developments in the Programmes and Initiatives category involved added outlays due to social security benefits (€18.4 million), state contribution
(€10.5 million which also features as revenue), feed-in tariff (€10.0 million), medicines and surgical materials (€9.4 million), church schools (€4.7 million), residential private care (€2.9 million), health concession agreements (€2.8 million), treasury pensions (€2.2 million), Jobsplus programmes (€1.9
million) and child care for all (€1.6 million).
This increase was offset by lower outlays related to the EU Presidency 2017 (€13.5 million) and the Heads of Government Event (€3.5 million).
Contributions to Government Entities and Operational and Maintenance Expenses increased by €9.5 million and €2.2 million respectively.
Data published by the National Statistics Office on Friday showed how capital expenditure was €3.8 million higher during the January – May period than in the same period last year, mostly as a result of higher spending on road works €.9.6m), National Identity Management System (€2.3m) and works on the shooting range (€2m). Spending on construction, refurbishment and restoration was €6m lower.
Recurrent revenue also grew, albeit at a slower pace. It was recorded at €1,577.9 million, up from €1,568.1 million last year. The comparative increase of 0.6 per cent was primarily the result of higher Income Tax and Social Security which both increased by €37.7 million and €28.2 million respectively. Moreover, increases were also recorded for Licences, Taxes and Fines (€17.8 million), Value Added Tax (€16.4 million) and Customs and Excise Duties (€4.1 million). Conversely, decreases were mainly recorded in Grants (€66.9 million), Fees of Office (€13.8 million), Central Bank of Malta (€9.0 million) and Rents (€5.8 million).
Debt held locally
EU-wide data provided by Eurostat shows that Malta continues to be one of the member states with the highest proportion of locally-held debt, with 62 per cent of public debt held by residents and resident corporation.
The country is also an EU outlier when it comes to the proportion of debt held by resident non-financial sectors. While the EU average is lower than 10 per cent, in Malta 26 per cent of public debt is held by the non-financial sector. Only Hungary, where the non-financial sector holds 20 per cent of public debt, comes close to Malta’s figure.
The vast majority of Malta’s public debt, 91 per cent, is in the form of debt securities. Some member states, such as Estonia, Greece and Cyprus, have a high percentage of public debt in the form of loans.