Although the fiscal deficit so far this year had narrowed when compared to 2009, it nevertheless still remained 8% higher than the deficit recorded in the first two months of 2008, the PL said in a statement.
The party said that the improvement in the fiscal balance during the first two months of 2010 was attributed to two factors.
On the one hand, recurrent expenditure declined by 2.5%. However, this was entirely underpinned by lower outlays on the voluntary retirement schemes paid out to shipyard workers, amounting to €17.2m.
Furthermore, government expenditure on medicines and surgical materials decreased by some €13.6m. This was reflected in the continuous shortage of medicine and/or the non-payment of supplies by medicine importers.
In account of these factors alone, recurrent expenditure should have declined by around €31m.
Furthermore, after accounting for the reclassification of the contribution to the Malta Tourism Authority (MTA) from Capital to recurrent expenditure (€7.4m), underlying recurrent expenditure increased by €12m.
A second factor underpinning the improvement in the fiscal balance was the rise of 12.9% in revenue, largely spurred by higher income tax and social security contributions.
"This is clearly unrelated to economic activity but is underpinned by the monies collected from the tax amnesty which closed on 22 February 2010," the PL said. The amnesty raised €32.4m.
"Thus, the overall rise in ordinary revenue simply reflects a one-off increase in revenue," the PL said.
LABOUR STILL IN DENIAL - PN
The Nationalist Party in a reaction said that the Labour Party was continuing to deny the facts that consistently showed an improvement in the Maltese economy, despite the international recession.
"Even though we need to take these facts, as ever, with caution, a string of positive economic statistics is undeniable. The economy has been growing in the last quarter for which figures have been published, and this is positive growth not only compared to the previous quarter but also compared to the same quarter of the previous year. The rate of unemployment has stabilized at around 5% which is much less than in other countries in the EU and much less than the high 10% plus unemployment that prevailed in previous recessions in Malta," the PN said.
Investors' confidence had been shown in the take-up of both public and private investment opportunities. Private consumption was been an element underpinning economic growth and showing an improving confidence level.
Malta was also attracting foreign investment, Inflation was on the decline, and tourism had shown an increase of 10% in the latest month for which official figures have been published. Government finances, even though taken on the first two months of this year, had shown a € 45 million improvement.
"Labour keeps repeating its negative and extreme doom and gloom rather than congratulating all hard-working Maltese families," the Pn said.