A sharp rise of 4.5 per cent in the country’s public debt, putting it at a whopping 75 per cent of GDP, has been explained away as a temporary blip by Finance Minister Tonio Fenech.

The debt rose by €431 million in 12 months, according to new statistics published in Brussels yesterday. At the end of March it stood at €4.8 billion.

But Mr Fenech described the rise as a temporary measure stemming from a move to exploit low borrowing costs.

“The government has front-loaded the borrowing for a whole year to take advantage of low interest rates,” he said.

Government bonds that matured over the rest of the year would not be replaced, so the debt was forecast to go down to 72 per cent of GDP by the end of 2012.

Another reason for the high figure, he explained, was the inclusion in the debt of guarantees made to the Eurozone Financial Stability Fund earmarked as financial aid for ailing governments.

If these guarantees were to be removed from the equation, then the debt would go down to 69 per cent, he said.

According to Eurostat, the EU’s statistics arm, Malta’s debt is still relatively low compared to other countries in the euro area, which stood at an average 88.2 per cent of GDP at the end of March. However, Malta’s debt during the period soared by more than twice the euro area’s average of two per cent.

Greece registered the highest debt in the eurozone, reaching 132.4 per cent of GDP, followed by Italy (123.3 per cent) and Portugal (111.7 per cent). New entrant Estonia has the lowest debt in the euro area, at a mere 6.6 per cent of GDP.

Under new EU rules, member states should try to limit their debt to around 60 per cent of GDP.

Earlier, Labour MP Karmenu Vella said the discrepancy between the government’s most recent projections and figures issued by the European Commission amounted to 6.5 per cent of GDP.

He criticised Mr Fenech for having projected, just last April, that national debt would gradually fall to 68.7 per cent of GDP by 2013.

The European Commission, he said, expected Malta’s national debt to grow, rather than fall: to 74.8 per cent of GDP next year and 75.2 per cent by 2013.

The €430 million gap proved the Labour Party and its economic analysis right, he added, challenging the Finance Minister to say whether he believed the debt reduction targets he had set would still be met.