The shortfall between recurrent revenue and total expenditure for the first quarter of 2007 amounted to Lm55.6 million, a decrease of Lm4.9 million or 8.1 per cent from a shortfall of Lm60.6 million for the first quarter of 2006, the National Statistics Office reported yesterday. An increase of Lm9.2 million in recurrent revenue was in part offset by an increase of Lm4.3 million in total expenditure.

During the first three months of the year, revenue from income tax increased by Lm7.3 million, while revenue from value added tax rose by Lm2.4 million. Revenue from Customs and Excise duties and profits from public corporations yielded an additional Lm2 million and Lm1.9 million respectively.

On the other hand, during the first quarter of this year revenue from grants amounted to Lm2.1 million, whereas during the same period last year Lm11.3 million had been received

Recurrent expenditure amounted to Lm193.1 million, an increase of Lm11.8 million compared to January-March 2006. During the first quarter of this year, higher outlays were reported on social security benefits (+Lm3.5 million), as well as by the Investment, Industry and Information Technology Ministry (+Lm4.2 million, mainly brought about by comparatively higher expenditure under the “contributions to government entities” category).

The interest component of the public debt servicing costs for the January-March period declined by Lm0.6 million, amounting to Lm22.9 million. This decline was the result of lower interest payments on the government’s long term borrowing.

During the first quarter of 2007, capital expenditure amounted to Lm21.0 million, registering a decline of Lm6.9 million, when compared to the expenditure of Lm27.9 million for January-March 2006. This decrease was in part due to a reduction in capital outlay by the Finance Ministry (-Lm4 million), the Tourism and Culture Ministry (-Lm2.5 million) and the Urban Developments and Roads Ministry (-Lm1.1 million).

No new loans were taken up during the first quarter of the year. The central government debt outstanding at the end of March amounted to Lm1,375.7 million, a reduction of Lm41.6 million compared to the debt position at the end of March 2006. This decline was brought about by a reduction of Lm23.4 million in Malta government stocks and Lm7.3 million in the short-term borrowing component, as well as a reduction of Lm10.3 million in foreign borrowing.