Malta had second highest deficit in EU last year, Eurostat figures show

Eurostat figures show that Malta’s deficit was the second highest last year but its debt remained below the 60% threshold

22 April 2021, 4:45pm
by Kurt Sansone

2 min read

Eurostat figures show that the government deficit across the EU increased significantly last year

Malta had the second highest deficit across the EU last year but its debt-to-GDP ratio was one of 13 countries to remain below the 60% threshold.

Eurostat figures released today show that with a deficit of 10.1% last year, Malta was second only to Spain that recorded a deficit of 11%.

Governments across the EU spent heavily last year to mitigate the impact of the COVID-19 pandemic on the economy. The higher expenditures and drop in revenues as a result of reduced economic activity saw all 27 EU countries register deficits.

Eurostat said that in 2020, the government deficit of both the euro area and the EU increased significantly compared with 2019, as did the government debt. In the euro area the government deficit to GDP ratio rose from 0.6% in 2019 to 7.2% in 2020, and in the EU from 0.5% to 6.9%.

Malta’s deficit was the first after a three-year run of surpluses. Finance Minister Clyde Caruana said this week that the coronavirus pandemic resulted in an additional daily expense of €5 million.

The deficit for the current year has been revised upwards to 12% as government will continue the wage support scheme until December.

The higher deficit also contributed to a higher debt level but with Malta’s debt-to-GDP ratio having been slashed in previous years, the country had enough space to manoeuvre.

Eurostat figures show that with a debt of 54.3%, Malta had the 10th lowest debt-to-GDP ratio and was one of 13 countries to still remain below the 60% threshold.

In the euro area the government debt-to-GDP ratio increased from 83.9% at the end of 2019 to 98.0% at the end of 2020, and in the EU from 77.5% to 90.7%.

The lowest debt ratios were recorded in Estonia (18.2%), Luxembourg (24.9%), Bulgaria (25.0%), Czechia (38.1%) and Sweden (39.9%). Fourteen member states had government debt ratios higher than 60% of GDP, with the highest registered in Greece (205.6%), Italy (155.8%), Portugal (133.6%), Spain (120.0%), Cyprus (118.2%), France (115.7%) and Belgium (114.1%).

Kurt Sansone is Executive Editor of MaltaToday. He was formerly deputy editor of MaltaTod...