In the last quarter of 2023, the General Government recorded a deficit of €596.9 million, the NSO said Monday.
At the end of December 2023, General Government debt stood at €9,767.8 million, or 50.4 per cent of Gross Domestic Product (GDP).
During the period October to December 2023, total revenue stood at €1,711.7 million, an increase of €66.0 million when compared to the corresponding quarter in 2022. This was mainly brought about by increases in Taxes on production and imports (€38.4 million), Net social contributions receivable (€31.5 million) and Market output (€18.6 million), partially offset by decreases in Current taxes on income and wealth (€37.6 million).
Total expenditure in the last quarter of 2023 amounted to €2,308.7 million, an increase of €320.7 million over the corresponding quarter in 2022. The largest increase was recorded in Capital transfers payable (€151.2 million), followed by Intermediate consumption (€59.3 million), Gross capital formation (€51.8 million), Compensation of employees (€33.4 million) and Property income payable (€22.9 million).
Adjustments were implemented to the Government’s Consolidated Fund data to transition to accrual-based accounting, aligning with the requirements of ESA 2010. During the last quarter of 2023, these adjustments resulted in a decrease of €163.2 million to the Consolidated Fund deficit, which stood at €760.2 million.
Quarterly financial accounts (t/t-1)
In relation to financial transactions in assets, during the last quarter of 2023, increases were recorded in Other accounts receivable (€285.7 million), Short-Term debt securities (€49.0 million) and Equity and investment fund shares (€42.1 million). Conversely, Currency and deposits and Long-Term loans decreased by €410.3 million and €19.7 million, respectively.
Considering the financial transactions in liabilities, the highest increases were recorded in Other accounts payable (€179.3 million), Short-term debt securities (€148.4 million) and Long-term debt securities (€122.1 million). In contrast, a decrease was registered in Currency and deposits (€1.0 million).
Quarterly debt (t/t-4)
At the end of December 2023, General Government debt stood at €9,767.8 million, or 50.4 per cent of Gross Domestic Product (GDP). This equates to an increase of €768.1 million over the corresponding quarter in 2022, largely reflected in Central Government Debt, which amounted to €9,766.0 million. Currency and deposits stood at €454.5 million, a decrease of €19.5 million over December of 2022. This includes euro coins issued in the name of the Treasury, considered a liability of Central Government, and the 62+ Malta Government Savings Bond, the latter amounting to €351.7 million. Long-term debt securities increased by €952.2 million, while Short-term debt securities decreased by €243.7 million, respectively. In addition, Long-term loans increased by €79.1 million. Local Government debt stood at €1.9 million.
General Government guaranteed debt amounted to €1,142.2 million at the end of December 2023, equivalent to 5.9 per cent of GDP. There was a decrease of €17.9 million when compared to the last quarter of 2022.
Government statement
In a statement, the Ministry for Finance noted that in 2023, both the deficit and the debt as a proportion of the Gross Domestic Product (GDP) of our country, have once again registered a decrease.
The published figures show that our country’s deficit has decreased from 5.5% in 2022 to 4.9% in 2023, which means a reduction of 0.6 percentage points. Debt as a proportion of GDP also recorded a decrease from 51.6% in 2022 to 50.4% in 2023 reflecting a reduction of 1.2 percentage points. These fiscal figures are more positive than those predicted in the last Budget where for the year 2023, it was predicted that the deficit as a percentage of GDP would decrease to 5.0%, while the debt ratio would amount to 52.78%.
The increase in the Government’s revenue was higher than the increase in expenditure for yet another year, reflecting the strong increases in employment and consumption. Thus, despite the several Government aids such as electricity, fuel, gas, and cereal subsidies as well as the implementation of various capital projects including the upgrading of the country’s infrastructure and green projects, among others, the Government still succeeded in reducing the deficit.
It should be noted that the debt of our country is significantly lower than what is required by the European Union debt criteria of 60% of GDP. The improvement in the deficit-to-GDP ratio will continue in the coming years, with a planned fiscal reduction of 0.5% every year as announced by the Minister for Finance Clyde Caruana in the Budget for the year 2024 and in line with the Economic Governance Framework after the agreement reached between the Finance Ministers of the European Union countries during an ECOFIN meeting last January.