Malta’s deficit continued to widen in July as the government spent €333 million more than it collected.
Compared with the same period last year the deficit was €95 million higher, according to the National Statistics Office.
However, the Finance Ministry said the country’s finances were on a sure footing and gave investors “peace of mind”.
The figures released yesterday for the seven months to July showed expenditure across all categories had increased by almost 11 per cent.
Even though revenue increased by €72 million, this was outweighed by a rise of €167 million in expenditure.
The NSO said that by July revenue had reached €1.4 billion while expenditure topped €1.7 billion.
An increase in social security benefits to the tune of almost €30 million, medicines and surgical materials by €12 million, and contributions to government entities by €17 million, were the principal drivers behind the higher outlay. The civil service wage bill rose by nearly €10 million while operational and maintenance expenditure shot up by €11 million.
Capital expenditure also increased by €42 million, which included the €20 million share capital injection in Air Malta.
While income from VAT, social security contributions and income tax increased, the NSO recorded a drop of almost €16 million in excise taxes and €45 million in grants.
In July debt reached €4.8 billion, an increase of nearly €400 million over the same month a year earlier. Earlier this week the Central Bank of Malta warned the government may have to take additional measures to curb expenditure and rein in the deficit after publishing the quarterly review for the first three months.
But the Finance Ministry said partial financial results did not necessarily translate into a trend.
It reiterated that the first half of the year saw the government spend millions to save Air Malta and subsidise Enemalta’s higher fuel cost so that electricity tariffs could remain the same.
The government was committed to achieving its targets, the ministry said.
Labour Party finance spokesman Karmenu Vella said the government was duty-bound to explain why it missed its financial targets and allowed the deficit and debt to increase.
Mr Vella said the Prime Minister had to explain whether the targets set out in the Budget were achievable.