The government is confident that it can keep the deficit below 2.5% of GDP by the end of this year, Finance Minister Tonio Fenech said on TVAM this morning.

The government is also projecting to reduce the deficit to 1.7% by the end of next year.

The minister did not specify the projected deficit figure for this year, but said that with most tax revenue coming in during December, the government was confident of keeping its target.

The deficit was brought down to 2.7 per cent last year and had projected a further drop to 2.3 per cent his year. Later, however, the government said it was committed to ensure that it achieved a deficit level which was significantly lower than 3% and closer to the 2.3% budgeted.   See http://www.timesofmalta.com/articles/view/20120906/local/Minister-s-doubt-over-deficit-aim.435756

Speaking in a hoarse voice, the minister said the budget was being presented against a difficult economic scenario.

He said the European Commission had evaluated the government's financial plans and projections and decided that they were achievable, so much so that it lifted the Excessive Deficit Procedure which Malta had been subjected to.

The government's priority, he said, remained that of safeguarding jobs.

The government wanted to narrow the deficit by some 0.5% per year with the ultimate aim being of achieving a balanced budget, ensuring that the economy could better weather the international storms and grow.