At €225.6 million, the deficit between January and March was significantly higher than in the same quarter last year, figures out yesterday showed.
The National Statistics Office said that the shortfall between revenue and expenditure widened by €58.1 million as the increase in expenditure outpaced higher receipts.
During the first three months of 2014, recurrent revenue rose by €41.3 million to reach €637.8 million, while expenditure went up by €99.4 million to hit €863.4 million.
In the first three months last year – when government expenditure was constrained by the Constitution because the Budget had not passed – the deficit stood at €167.5 million.
Higher revenues were recorded from income tax (€34.7 million), VAT (€24.3 million) and social security (€10.6 million).
Compared with the first quarter last year, higher spending was registered in recurrent expenditure and interest payments.
These were partially offset by lower outlays on capital projects. Recurrent expenditure increased by €104.4 million, mainly as a result of higher spending on programmes and initiatives (€57.7 million) and contributions to government entities (€23.7 million).
The major increases registered in the programmes and initiatives category were recorded in medicines and surgical materials (€13.7 million), funds used to part-finance EU-sponsored projects (€9 million), assistance to help the elderly live independently (€7.6 million), the feed-in tariff for electricity generated by householders using solar panels (€5 million) and social security benefits (€4.5 million). Operational and maintenance expenditure and wages went up by €11.7 million and €11.2 million respectively.
Interest on public debt servicing costs rose to €53.8 million from €51.4 million last year.
Expenditure on capital projects amounted to €96.7 million, a reduction of €7.4 million over the corresponding period last year.
This was mainly the result of a lower equity injection to the national air carrier. At the end of March, debt stood at €5.2 billion.
Reacting to the news, the Nationalist Party said the figures “burst the Prime Minister’s bubble” when he sounded triumphant at the confirmation that last year’s deficit went below three per cent.
“The fact that the deficit exploded in the first three months shows that last year Muscat did not control the deficit but simply postponed important decisions,” PN spokesmen Mario de Marco and Tonio Fenech said.
The NSO figures shed doubt on how the government managed to reach the 2.8 per cent deficit target last year, they added.
“The government has also failed to explain the €400 million discrepancy in public debt last year.”