Malta records first-quarter surplus

For the first time in history: a surplus in the Consolidated Fund in the first quarter.

Between January and March this year the Government recorded a surplus of €42 million. This was the first time in Malta’s history that a surplus was observed in the Consolidated Fund in the first three months of the year. In fact, even in the years when the country had a surplus for the year as a whole, i.e. between 2016 and 2019, there was not surplus in the early part of the year. The best financial result for the first quarter of the year before this year was a deficit of €13 million in the first quarter of 2017.

The surprising result for the first quarter of this year was largely due to an unprecedented increase in revenue. In fact, the Government saw revenue rise by almost a quarter of a billion euros, or by 16%. Much of this increase came from increased income tax, evidence of how much the economy is growing. There have also been large increases in National Insurance contributions and VAT revenues.

Official statistics indicate that, in the first three months of the year, spending increased by less than 3%, or five times less than the increase in revenue. Over three months, the government spent almost €100 million on capital projects, while the outlays on social protection increased by almost €90 million to reach a record €620 million. Even the sum invested in education has reached record levels.

Between February and March, the central Government’s debt decreased by €127 million. This reflects the fact that the situation of the Consolidated Fund is €177 million better than in the same period last year.

In the first three months of 2021, the country had registered a deficit of €530 million. In just three years the Government managed to move from such a strong deficit to a surplus, without increasing any taxes and while keeping the price of energy and fuel stable. This confirms the prudent management of public finances and the success of the economic policy put in place by the current administration.

Photo: Polina Kovaleva

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