Government records €339 million deficit in Q1 2026

The Government recorded a deficit of €339 million for the first quarter of 2026, marking the second quarter in a row where its expenditure was higher than its revenue.

Between January and March 2026, total revenue amounted to €2,002.3 million, an increase of €42.5 million compared with the same quarter in 2025, the National Statistics Office said. It noted increases in taxes on production and imports (€66.2 million), capital transfer receivables (€26.0 million), and market output (€25.5 million).

The NSO also noted a decrease in current taxes on income and wealth (€93.7 million).

Total expenditure in the first quarter of 2026, meanwhile, reached €2,341.3 million, an increase of €296.3 million over the corresponding quarter in 2025. The largest increase was recorded in intermediate consumption (€93.3 million), followed by social benefits and social transfers in kind (€66.5 million), and compensation of employees (€54.4 million).

The NSO said that adjustments were implemented to the Government’s Consolidated Fund data to transition to accrual-based accounting. In the first quarter of 2026, these adjustments increased the Consolidated Fund deficit by €254.7 million, from €84.3 million to €339.0 million.

In terms of General Government debt, at the end of March, it stood at €11,457.6 million, equivalent to 45.9 per cent of Gross Domestic Product (GDP).

This represented an increase of €549.3 million over the corresponding quarter in 2025, largely reflected in Central Government Debt, which amounted to €11,455.4 million.

BusinessNow.mt recently spoke to two economists about the debt, and they argue that the debt figure should not be viewed in isolation. Instead, 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.

The NSO said that long-term debt securities increased by €383.6 million, while short-term debt securities increased by €197.1 million. In addition, short-term loans increased by €1.8 million, while long-term loans decreased by €0.7 million.

General Government guaranteed debt amounted to €896.7 million at the end of March 2026, equivalent to 3.6 per cent of GDP. There was a decrease of €81.3 million when compared to the first quarter of 2025.