In January-July 2016, Government’s Consolidated Fund registered a defi cit of €141.0 million, the National Statistics Office said today.

Government Finance Data: January-July 2016

Compared to the same period last year, recurrent revenue registered an increase of €35.1 million whereas total expenditure went up by €1.3 million. This resulted in a positive change in the Government’s Consolidated Fund by €33.8 million.

In January-July 2016, recurrent revenue was recorded at €1,907.0 million, up from €1,871.9 million last year. The comparative increase of 1.9 per cent was primarily the result of higher Income Tax and added Social Security by €67.0 million and €39.3 million respectively. Moreover, increases were also recorded for Licences, Taxes and Fines (€21.8 million), Value Added Tax (€11.4 million) and Customs and Excise Duties (€9.0 million), among others. Conversely, major decreases were recorded in proceeds from Grants (€101.0 million).

Compared to January-July last year, total expenditure stood at €2,048.0 million up from €2,046.8 million, mainly as result of added outlays on recurrent expenditure almost outweighed by lower spending on capital expenditure and interest payments. Recurrent expenditure stood at €1,769.5 million from €1,675.1 million last year.

This was due to higher outlays on all components of recurrent expenditure whereby Contributions to Government Entities went up by €31.6 million and Programmes and Initiatives increased by €29.1 million. The main developments in the latter category involved higher social security benefi ts (€16.8 million), a rise in the social security state contribution (of €13.4 million which also features as revenue), added outlays due to CHOGM (€4.2 million), church schools (€3.5 million), and EU Presidency 2017 (€3.4 million).

On the other hand, lower EU Own Resources were recorded (€12.9 million). Increases were also registered in Personal Emoluments (€19.6 million) and Operational and Maintenance Expenses (€14.1 million). The interest component of the public debt servicing costs stood at €128.7 million, down from €131.3 million last year. Government’s capital expenditure witnessed a decline of €90.6 million, and was recorded at €149.8 million.

This was mainly the result of lower spending on EU funded projects mainly those related to sewage and agriculture. Other declines were recorded in the external borders fund, the acquisition of property for public purposes and investment industry incentives. At the end of July 2016, Central Government Debt stood at €5,547.9 million, up by €148.8 million over the corresponding period last year. This was the result of higher Malta Government Stocks and Treasury Bills, which added €148.2 million and €51.7 million respectively.

On the other hand, Domestic Loans with commercial banks and Foreign Loans went down by €56.4 million and €10.5 million respectively. Lower holdings by government funds in Malta Government Stocks resulted in an increase in debt of €10.2 million. The Euro coins issued in the name of the Treasury went up by €5.6 million when compared to the coin stock as at the end of July 2015, and totalled €69.7 million.

Deficit being held in check - Scicluna

In a statement the Finance Ministry said: "The consolidated fund deficit decreased by €33.8 million between January and July 2016 when compared with the same period last year as Government expenditure increased by just €1.3million or 0.1 per cent while recurrent revenue increased by €35.1 million or 1.9 per cent.

Recurrent revenue grew as a result of robust economic growth, with revenue from taxes increasing by €148.4million over the same period when compared to 2015.

The remarkable increase in net revenue was achieved in spite of the significant fall in EU grants reflecting the closure of the European Union financing period 2007-2013 at the end of last year. Reductions in the EU grant component is being balanced by lower EU funded capital expenditure. In fact, capital expenditure for the first seven months was €90.6 million lower than the peak of the previous year."

Finance Minister Edward Scicluna remarked that “It is encouraging to note that the first half of the year the deficit is being held in check. We will now have to ensure that this positive financial performance is continued to be kept throughout the whole year."