Deficit down, debt burden lower

Malta’s debt level better than that observed under every administration between 1998 and 2012.

Last year the fiscal deficit decreased from 5.5% of GDP to 4.9%. According to Eurostat, this happened in a context where, across the eurozone, 11 countries had either an increase in their deficit or else it remained stable.

Among the countries that saw an increase in the deficit, one can hardly fail to notice France, where the fiscal gap increased from 4.8% to 5.5%; almost the opposite of what happened in Malta. The deficit increased the most in Slovakia, where from a deficit of 1.7% in 2022 the gap rose to 4.9% last year.

Meanwhile, the Maltese government had the sixth largest improvement in the deficit around the eurozone. Now both France and Slovakia have a bigger deficit than Malta’s while, as was the case even in 2022, Malta has a deficit much lower than that of Italy. Whereas in 2022 there was a gap of 1.8% between our country’s deficit and the euro zone average, this gap has decreased to 1.3%, precisely because the improvement that took place in Malta was much better than that in the rest of the eurozone. For example, in Germany last year there was no improvement in the Government deficit.

As a result of the reduction in the deficit as well as strong economic growth, the burden of the national debt decreased from 51.6% in 2022 to 50.4% in 2023. This was the second consecutive year of reduction in the burden of the national debt. This indicator compares very well with the average level of debt around the eurozone, which stands at almost 89%, three quarters more than Malta’s.

In addition, the national debt is lower than the level observed in every year between 1998 and 2012. In fact, in 1998 the national debt was 51%, compared to 50% now. Between 1998 and 2012 the average national debt was 64%, more than a quarter more than the current level. The burden of the national debt rose the most in 2004, when it exceeded 71%, and in 2011 when it reached 70%.

Since the change in government in 2013, the average national debt ratio was 53%. This means that, last year, the burden of the national debt was better than the average since 2013.

It is worth recalling that, in the last Budget speech, the Minister of Finance set a deficit target of 5% for 2023 and of 53% in relation to the debt. The final results for the year indicate that the Government did better than the financial targets, also because the economy grew more than expected.

At the same time, figures released by the National Statistics Office indicate that, in 2023, the Government invested €1.1 billion between direct investment and capital transfers. This was twice the average of the capital programme observed since 2013, and five times the average under administrations between 1998 and 2012.

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments