Doubling down on capital projects

Almost €1 billion euros in capital investment last year, up 35% on 2022

Last year the Government spent almost one billion euros on capital projects. This emerges from figures issued by the National Statistics Office (NSO). The data published by this agency show that capital investment in health doubled compared to 2022, while that on the environment has exceeded €150 million for the first time in history. In education and national security, capital projects accounted for an allocation almost a quarter more than the previous year. In total, the total capital allocation was more than a third larger.

Despite this, the deficit on the Consolidated Fund decreased from €885 million in 2022 to €808 million last year. This was despite the surge in capital expenditure, increased outlays of almost €100 million euros on social benefits, and a higher allocation of €23 million due to free public transport.

Furthermore, the deficit was much lower than predicted in the Budget speech. Back then, the finance minister had projected a deficit of €969 million. Instead, the deficit was €161 million less, or a sixth better than predicted. While the forecast for revenue made in the Budget was very close to what was collected by the Government, the actual outturn for expenditure was almost a quarter of a billion euros less than expected. This kind of financial prudence has been characteristic of finance ministers since 2013.

The statement of the NSO indicates that the government’s biggest outlay last year was on social protection, with the allocation rising to over €2.2 billion – an increase of almost 10% on 2022. On health the Government spent more than €1 billion for the first time in history, with an increase of 11% on the previous year. Even in education, there was a 10% increase in public expenditure, with outlays reaching almost €850 million.

When it comes to revenue, the biggest increase was from income tax, where the Government raised almost €2.5 billion, or about a third of a billion euros more than the previous year. There was also a sharp increase in social security contributions, of more than €100 million. In contrast, for the first time in history, the Government had no income from the Central Bank. This appears to have been caused by the Central Bank having to pay high interest rates to commercial banks for their deposits, which in turn was a key factor underlying the record profits reported by local banks.

 Budget speech predictions  Final figures
Government revenue€6,477 million€6,413 million
Government expenditure€7,446 million€7,221 million
Deficit€969 million€808 million
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