Government deficit rises to €552.2 million by end of July

By the end of July 2026, the Government’s Consolidated Fund reported a deficit of €552.2 million for the year so far, data issued by the National Statistics Office shows.

This is higher than the €518.0 million deficit recorded during the same period a year prior, and higher than the €463.5 million recorded by the end of June this year.

Recurrent revenue between January and July amounted to €4.8 billion, €717.3 million higher than the figure reported a year earlier. The largest increases were from income tax (€362.8 million), VAT (€153.3 million) and grants (€110.3 million).

However, total expenditure by the close of July 2026 stood at €5.37 billion, which was €751.6 million higher than the previous year.

This was mainly due to an increase of €552.4 million in recurrent expenditure, which reached a total of €4.6 billion. The main contributor to this increase was a €272.4 million rise reported under programmes and Initiatives, which involved higher outlays towards Social security benefits (€98.9 million) and medicines and surgical materials (€31.5 million) among other things.

Further increases were also recorded under operational and maintenance expenses (€108.6 million), personal emoluments (€95.8 million), and contributions to Government entities (€75.6 million).

The NSO said that the interest component of the public debt servicing costs totalled €190.1 million, which is an increase of €22.0 million when compared to the previous year.

By the end of July 2026, Government’s capital expenditure amounted to €621.0 million, €177.2 million higher than the comparative period in 2025. 

Central Government debt stood at €11.7 billion, an increase of €540.3 million compared with 2025. The year-on-year increase reported under Malta Government Stocks (€334.7 million) was the main contributor to the rise in debt when compared to last year, and higher debt (€305.1 million) was also reported under treasury bills, it added.

However, compared to June this year the overall debt went down slightly, as in June it stood at €11.9 billion. This was due to a reduction reported under the Malta Government stocks when compared to June 2026.

BusinessNow.mt recently spoke to two economists about the debt, and they argue that the debt figure should not be viewed in isolation. They say the country's economic growth, debt-to-GDP ratio, fiscal position and the quality of government expenditure provide a more meaningful assessment of Malta's fiscal health.