Government records €95 million deficit as revenue falls and expenditure rises

The Maltese Government reported a €95 million deficit by the end of February 2025, a sharp reversal from the €151.4 million surplus recorded in February 2024, according to data published by the National Statistics Office (NSO) on Monday.

The negative shift in the Government’s Consolidated Fund reflects a combination of falling revenue and increased spending, with recurrent revenue falling by €103.8 million and total expenditure rising by €142.6 million year-on-year. This resulted in a €246.4 million deterioration in the government’s fiscal position.

Revenue plunge led by income tax decline

A significant contributor to the revenue drop was a €179.0 million decline in income tax receipts, suggesting a slowdown in corporate and individual earnings or changes in tax collection patterns. Meanwhile, on the expenditure side, programmes and initiatives accounted for the largest spending increase, rising by €63.3 million.

In detail, the rise in expenditure was primarily driven by:

• Social Security Benefits: +€31.8 million
• Church Schools: +€9.6 million
• EU Own Resources: +€7.4 million

Other expenditure categories also saw increases, with contributions to Government entities rising by €57.1 million, personal emoluments by €31.3 million, and operational and maintenance expenses by €8.3 million.

Capital spending drops, especially on roads

While recurrent expenditure increased, the Government’s capital spending fell by €23.6 million. The most significant reduction came from road construction and improvements, where spending dropped by €14.4 million. Other declines were noted in property, plant, and equipment (€5.3 million) and maritime facilities (€3.9 million).

Rising debt levels

The Government’s central debt also rose substantially, reaching €10,935.2 million – an increase of €859.1 million compared to February 2024. This increase was mainly due to a €842.5 million rise in Malta Government Stocks, alongside growth in Treasury Bills (€73.9 million) and Euro coins issued (€4.0 million).