Government deficit set to reach just under €1 billion in 2023

Malta’s Government deficit for 2023 is expected to be close to €1 billion, with the shortfall supported by over €1.6 billion in new Malta Government Stock, according to the Treasury’s annual borrowing plan for the year.

“The Treasury announces that the Central Government borrowing requirements for the financial year 2023 has been set to not exceed €1.6 billion. This amount will be raised through the issuance of Malta Government Stocks (MGS) with maturity of more than one year.”

The €1.6 billion figure is considerably higher than the amount raised in previous years. In 2022, the amount of debt expected to be issued stood at €1.2 billion. In 2021, it was €1.1 billion.

Late last year, leading stockbroker Edward Rizzo said that Malta is “undoubtedly entering a period of heightened issuance in the coming decade which is far higher than that seen in the period prior to the pandemic”, pointing to MGS maturities of between €356 million and €670 million annually over the next 10 years.

The funds raised this year will be used to finance the Government’s borrowing requirements for the year, including the redemption of sizeable tranches of MGS coming due in 2023, worth around €430 million, and the deficit expected to reach €979.92 million.

The Treasury intends to fund the financing requirements for 2023 over five to seven MGS issues.

It noted that as part of its issuance strategy, the Treasury shall retain the flexibility and capability to adapt quickly to changing market and other conditions and, where necessary will review the intervals of issuances.

Maturity and terms of issuance of Malta Government Stocks

The maturity structure of the 2023 MGS issues will be a mix of short and medium to long term MGS. The exact maturity and other details of the offer will be announced from one to two weeks prior to the opening of each issuance.