Momentum warns rising debt interest costs are draining public funds

Momentum has raised concerns over Malta’s growing debt servicing costs, warning that the government is now spending €261 million annually on interest payments, a sharp increase of 22% compared to the previous year.

The party was reacting to findings in the latest audit by the auditor general, which highlighted how rising interest rates and increased borrowing have significantly pushed up the cost of servicing public debt. According to the report, spending on debt servicing is reducing the funds available for other priorities, as money used to pay interest could otherwise be invested in initiatives that support economic growth and social welfare.

Momentum treasurer Carmel Asciak described the situation as a serious fiscal challenge that requires urgent attention. He said the growing burden of debt servicing raises questions about the sustainability of Malta’s public finances and the country’s ability to continue investing in infrastructure, education, healthcare and social services.

Asciak warned that if a disproportionate share of public resources continues to be absorbed by interest payments on past borrowing, Malta’s economic growth could be undermined. He added that future generations risk being doubly affected, as they will inherit both the responsibility of repaying the debt and the consequences of reduced investment in critical sectors.

Momentum is calling for a comprehensive strategy to manage existing debt while safeguarding long-term investment in the country’s future. The party urged the government to improve fiscal management by cutting unnecessary expenditure and increasing efficiency in public spending.

It also pointed to a series of controversies, including the Vitals and Steward deal, Ta’ Qali, ITS, Fortina and the Fort Chambray land sale, which it said exemplify waste of public funds. Momentum argued that money lost through such cases, as well as through what it described as dubious direct orders, could have been used to reduce public debt and ease the growing burden of interest payments.

The party said it remains committed to advocating policies aimed at fiscal sustainability, economic stability and social welfare for all Maltese citizens.