ministry finance

Malta’s central Government debt has increased by €942.9 million when compared to 2022, and now stands at €9.68 billion.

This increase has been largely fuelled by a surge in Malta Government Stocks (MGS), which saw the total value issued increase by €1.4 billion.

Between January and October 2023, recurrent revenue amounted to €5.2 billion, €694.9 million higher than the figure reported a year earlier. The largest increases were recorded under income tax (€427.8 million), social security (€91.2 million) and grants (€62.4 million). On the other hand, the main drops in revenue were reported under miscellaneous receipts (€36.9 million) and Central Bank of Malta (€22.2 million).

Total expenditure by the end of October 2023 stood at €5.4 billion, €202.2 million higher than the previous year.

During the reference period, recurrent expenditure totalled €4.7 billion, an increase of €126.7 million compared to the €4.5 billion reported at the end of October 2022. The main contributor to this increase was a €61 million rise reported under contributions to Government entities. Higher contributions were, among others, made towards the Malta Tourism Authority (€11.8 million), Resource Support and Services Ltd (€9.3 million) and Environment and Resources Authority (€5.1 million). Furthermore, increases were also recorded under operational and maintenance expenses (€56.9 million) and personal emoluments (€46.4 million). Conversely, programmes and initiatives fell by €37.6 million.

The main developments in the programmes and initiatives category involved lower outlays towards pandemic assistance schemes (€117.8 million) and EU own resources (€52.9 million). The drop in outlay was partially offset by increases witnessed under social security benefits (€87.4 million), medicines and surgical materials (€32.2 million) and Tal-Linja card (€17 million).

The interest component of the public debt servicing costs totalled €175 million, an increase of €30 million when compared to the previous year.

While the cost of borrowing to finance higher spending during the last couple of years had remained low as MGS bonds carrying relatively high interest rates matured, decreasing the average interest being paid, this trend is now starting to reverse due to the return of high interest rates. The cost of financing public debt is therefore expected to continue increasing in the short to medium term.

Between January and October 2023, Government’s capital spending amounted to €544.7 million, €45.5 million higher than 2022. This increase resulted from higher expenditure towards the REPowerEU initiative (€20 million), property, plant and equipment (€18.2 million) and National Identity Management Systems (€6.6 million).

The difference between total revenue and expenditure resulted in a deficit of €155.7 million being reported in the Government’s Consolidated Fund at the end of October 2023. Compared to the same period in 2022, there was a decrease in deficit of €492.7 million. This difference mirrors an increase in total recurrent revenue (€694.9 million), partly offset by a rise in total expenditure, which consists of recurrent Expenditure (€126.7 million), interest (€30 million) and capital expenditure (€45.5 million).

At the end of October 2023, Central Government debt stood at €9.68 billion, an increase of €942.9 million when compared to 2022. The increase reported under Malta Government Stocks (€1.4 billion) was the main contributor to the rise in debt. Higher debt was also reported under Euro coins issued in the name of the Treasury (€4.6 million).

This increase in debt was partially offset by drops in Treasury Bills (€415.5 million) and the 62+ Malta Government Savings Bond (€23.5 million). Finally, higher holdings by Government funds in Malta Government Stocks resulted in a decrease in debt of €23.9 million.

Featured Image:

Ministry for Finance / Frank Vincentz, GFDL Licence

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