January registers massive reduction in government spending

The government deficit in January - where spending was limited to 33% after the government's budget was not passed by the House in December 2012 - amounted to €58.1 million, down from €129.3 million in January 2012.

During January recurrent revenue registered an increase of €61 million while expenditure went down by €10.2 million, narrowing the deficit between recurrent revenue and total expenditure to €58.1 million.

During the first month this year, recurrent revenue was recorded at €218.5 million, up from €157.6 million last year. The comparative increase of 38.7 per cent was mainly the result of higher returns from Grants (+€34.0 million), Income Tax (+€17.6 million), Social Security (+€7.8 million) and Value Added Tax (+€3.3 million). These increases were partly outweighed by a fall in Rents (-€1.5 million).

Conversely, compared to January last year, lower spending was registered in all expenditure components resulting in a fall in total expenditure of €10.2 million, to €276.7 million. Recurrent expenditure declined by €9.3 million, totalling €222.4 million.

Lower outlays were mainly registered in operational and maintenance expenditure (-€5.6 million) and in contributions to government entities (-€4.1 million). Moreover, programmes and initiatives went down by €1.5 million mainly due to lower social security benefits (-€8 million) and street lighting (-€4.4 million).

These were partially outweighed by added expenditure on medicines and surgical materials (+€6.0 million) and the contribution to the EU budget (+€3.7 million). Conversely, an increase was registered in personal emoluments (+€1.8 million).

The interest component of the public debt servicing costs for the period under review declined marginally to €18.3 million from €18.4 million last year.

In addition, Government's Capital Expenditure for January stood at €36 million from €36.7 million last year. Major declines were registered in PC leasing (-€2.7 million), direct investments (-€1.2 million) and in the acquisition of property (-€0.6 million).

Conversely, higher outlays were recorded in the EU agriculture guarantee fund (+€2.7million) and road construction improvements (+€1.1 million).

Central Government debt stood at €4,765.5 million, up by €322.8 million over the corresponding period last year. This increase was the result of higher long-term and short-term borrowing, which added €297.5 million and €53.7 million respectively. On the other hand, foreign borrowing went down by €12.5 million. Moreover, as a result of consolidation, higher holdings by government funds in MGSs resulted in a reduction of €20.7 million. The euro coins issued in the name of the Maltese Treasury went up by €4.9 million when compared to the coin stock as at the end of January 2012, and totalled €50.2 million, down from €129.3 million.