Deficit went up to €1,139.0 million by September

Miguela Xuereb

By the end of the third quarter of 2020, the Government’s Consolidated Fund reported a deficit of €1,139.0 million, according to the latest statistics published by NSO, the National Statistics Office.

Between January and September 2020, recurrent revenue amounted to €2,930.3 million, a 17.8% drop from the €3,563.7 million reported in revenue up to the end of September 2019. The largest decrease was reported under Income Tax (€225.6 million).

Additional drops were also witnessed under Value Added Tax (€152.7 million), Grants (€84.7 million), Social Security (€75.6 million), Licences, Taxes and Fines (€71.3 million), Customs and Excise Duties (€57.1 million), Reimbursements (€9.8 million), Rents (€8.1 million) and Dividends on Investment (€2.8 million).

In contrast, increases were recorded under Miscellaneous Receipts (€30.0 million) and Fees of Office (€24.4 million).

By the end of September 2020, total expenditure amounted to €4,069.4 million, 15.4% higher than the corresponding period in 2019.

During the period under review, recurrent expenditure totalled €3,320.3 million, a rise of €295.4 million when compared to the €3,024.8 million reported in 2019.

The rise in expenditure was partially off set by drops reported under Social security state contribution (€32.9 million, also reported as revenue) and EU own resources (€9.9 million).

The interest component of the public debt servicing costs totalled €138.7 million, an €8.4 million decrease from the same period in 2019.

By the end of September 2020, Government’s capital spending amounted to €610.4 million, €256.5 million higher than 2019, largely due to additional spending towards investment incentives (€251.1 million), which amounted to €275.2 million, including €237.0 million spent in relation to the COVID-19 Business Assistance programme.

The difference between total revenue and expenditure resulted in a deficit of €1,139.0 million being reported in the Government’s Consolidated Fund at the end of September 2020. This represented an increase in deficit of €1,176.9 million when compared to the surplus of €37.9 million witnessed during the same period in 2019.

Decreases in revenue and increases in expenditure reflect developments related to COVID-19.

At the end of September 2020, Central Government debt stood at €6,623.4 million, a €1,367.9 million rise from the previous year. Increases reported under Malta Government Stocks (€793.8 million) and Treasury Bills (€478.2 million) were the main reasons for the rise in debt. Higher debt was also reported under the 62+ Malta Government Savings Bond (€91.4 million) and Euro coins issued in the name of the Treasury (€2.3 million).

In contrast, lower debt was registered under Foreign Loans (€0.1 million). Finally, lower holdings by government funds in Malta Government Stocks resulted in an increase in debt of €2.3 million.