Malta’s deficit has fallen below the Maastricht Treaty target of 3 per cent of GDP, according to statistics released yesterday. However, the government debt went up to €5.24 billion (73 per cent of GDP) compared with €4.87 billion (70.8 per cent of GDP) a year before. In 2011, it was 68.8 per cent.
The deficit was €203 million, down from €225.7 million for 2012, meaning the ratio fell from 3.3 per cent in 2012 to 2.8 per cent. In 2011, it was 2.7 per cent.
The results are particularly significant as both the European Commission and credit rating agencies had forecast that Malta’s deficit would actually increase to 3.7 per cent, let alone fall below the 3 percent threshold.
The figures released by the National Statistics Office and Eurostat show that Malta is faring better than the EU average for both deficit (3%) and debt (92.6%). However, the performance across the member states shows stark differences.
Luxembourg actually registered a surplus of 0.1 per cent, with Germany close to balance while, at the other end of the spectrum, 10 member states had deficits above the 3 per cent target, with the worst offenders being Slovenia (-14.7 per cent), Greece (-12.7%) and Ireland (-7.2%).
The debt ratios show a similar spread, with Estonia reporting a ratio of just 10 per cent but Greece still struggling with a debt-to-GDP ratio of 175.1 per cent.
Finance Minister Edward Scicluna welcomed the news, saying it showed that people had been right to put their trust into a Labour administration.
“This achievement shows that this government was able to take the country from a downhill route to one that will lead us to more financial stability and economic growth,” he said in a statement, pointing out that the previous government had raised the deficit to 3.3 per cent, triggering the Excessive Deficit Procedure in 2012.
The NSO said that the factors with major impact were time-adjusted cash transactions (€41.9 million), other accounts receivable and payable (€22.6 million) and the non-financial transactions in the treasury clearance fund (€4.9 million).
On the other hand, the main downward adjustments were the equity injection to Air Malta (€40.0 million), the net borrowing of Extra Budgetary Units (€7.4 million), interest received not included in the consolidated fund (€2.8 million) and the adjustment for stock premium proceeds (€1.6 million).