In the first half of the year, a drop of 14.7 per cent was registered in the shortfall between recurrent revenue and total expenditure of the central government, the National Statistics Office reported.
The contraction of €49.7 million in the government deficit was the result of a rise in recurrent revenue of €88.5 million, which was partly offset by additional expenditure of €38.8 million.
During the period under review, recurrent revenue was recorded at €1,057.7 million. The comparative increase of 9.1 per cent was brought about by higher returns from Income Tax (+€30.6 million), Grants (+€25.0 million), Value Added Tax (+€21.2 million), Miscellaneous Receipts (+€8.9 million) and Customs and Excise Duties (+€8.7 million). On the other hand, declines in recurrent revenue were registered in Licences, Taxes and Fines (-€8.7 million) and Fees of Office (-€5.4 million).
Total expenditure for the first six months stood at €1,345.5 million, up by €38.8 million.
The increase in recurrent expenditure was triggered by a greater outlay on social security benefits of €22.4 million, the reclassification of the Malta Tourism Authority (which shifted €15.1 million from capital to recurrent expenditure) and higher Personal Emoluments, also by €15.1 million.
Conversely, declines were recorded in the shipyards’ voluntary retirement schemes and in medicines and surgical materials, of €17.5 million and €16.9 million respectively.
Capital expenditure went up by €19.8 million. This was mainly due to increases in the EU Cohesion Fund 2007-2013 of €13.3 million relating to the Malta South Sewage Treatment Infrastructure and of €10.0 million in connection with the introduction of the Jeremie Financial Engineering Fund.
Furthermore, growths were registered in the EU Structural Funds relating to Education, of €7.8 million, and the External Borders Fund, of €6.0 million. These were in part outweighed by the reclassification of the Malta Tourism Authority.
The interest component of the public debt servicing costs edged up from €96.7 million in January- June 2009 to €98.4 million this year.
At the end of June 2010, the central government debt stood at €4,104.3 million, a rise of €283.9 million, or 7.4 per cent, over the corresponding month last year. The contributor to this change was long-term borrowing, which added €385.4 million and accounted for 82.1 per cent of total government debt. On the other hand, declines were registered in short-term securities and foreign borrowing, of €91.6 million and €13.0 million respectively. The euro coins issued in the name of the Maltese Treasury rose by €3.9 million and totalled €38.8 million when compared to the euro coin stock as at the end of June 2009.