Tonio Fenech to present 'responsible' budget

Finance minister Tonio Fenech vowed that the forthcoming budget will be "a responsible one that will prioritise the creation of jobs and economic growth."

Speaking during the launch of the pre-budget document this afternoon, Fenech explained that the increase in deficit registered in the first half of the year was down to the €25 million poured into Enemalta's coffers to absorb some of Enemalta's debts and ease the beleaguered corporation's financial difficulties.

Only a few days ago, the National Statistics Office said that in the first half of 2012, the government's shortfall between recurrent revenue and total expenditure amounted to €284.3 million, an increase of €94.1 million compared to the same period in 2011.

However Fenech insisted that the increase was the result of "the front-loading of €40 million, which includes the €25 million the government gave Enemalta."

Enemalta is saddled with a debt of almost €600 million, with the interconnector between Malta and Sicily projected to cost a further €200 million.

The NSO has also published figures which show that at the end of June, central government debt stood at €4,794.9 million, up by €361.4 million, or 8.2%, over the corresponding period last year.

Asked why the debt has increased so steeply in the first part of the year, Fenech said the government borrowed up to €500 million "which it did not really need" to profit from the favourable interest rates available in the first half of the year.

However, Fenech said the government is on track to achieve it's targets to keep the deficit down to 2.2% of the Gross Domestic Product (GDP) and keep debt below 60% of GDP by the end of the year.

Fenech said that the main aim of the budget would be to strengthen fiscal stability with an objective to continue towards the achievement of a balanced budget and a steady reduction of debt.