At the end of August 2010 Central Government Debt stood at €4,246.6 million, a rise of €268.9 million, or 6.8 per cent, over the corresponding period last year. During the period under review, long-term borrowing, making up 84.0 per cent of Government Debt, added €365.2 million. On the other hand, short-term securities and foreign borrowing declined by €86.5 million and €12.8 million respectively. The euro coins issued in the name of the Maltese Treasury rose by €3.9 million when compared to the euro coin stock at the end of August 2009, and totalled €40.4 million.

In the first eight months of the year, the shortfall between recurrent revenue and total expenditure of Central Government amounted to €275.4 million, a decrease of €69.7 million.

Tthe increase in total expenditure of €86.2 million was more than offset by a rise in recurrent revenue of €155.8 million, hence lowering the government deficit by €69.7 million. During the period under review, recurrent revenue was recorded at €1,509.9 million. The comparative increase of 11.5 per cent was mainly the result of higher returns from Value Added Tax (+€40.0 million), Customs and Excise Duties (+€32.2 million), Grants (+€23.9 million) and Income Tax (+€21.5 million). A decline of €8.1 million was observed in Licences, Taxes and Fines.

Total expenditure for January-August 2010 stood at €1,785.3 million, up by 5.1 per cent as a result of more outlays on recurrent and capital expenditure.

The increase in recurrent expenditure was triggered by, among others, higher spending on Social Security Benefits by €27.8 million, the reclassification of the Malta Tourism Authority from capital to recurrent expenditure which amounted to €21.1 million, a rise in Personal Emoluments of €19.6 million, higher budgetary compensation in respect of Energy Support Measures by €13.5 million, and an increased allocation in respect of Local Councils by €9.0 million. Conversely, declines were recorded in the shipyards’ voluntary retirement schemes and in medicines and surgical materials, of €17.6 million and €15.1 million respectively.

Capital expenditure added €33.5 million. This was mainly due to increases relating to the Malta South Sewage Treatment Infrastructure of €15.8 million and an amount of €10.0 million in connection with the introduction of the Jeremie Financial Engineering Fund. Furthermore, a growth was registered in the transfer of €24.8 million to the Treasury Clearance Fund. These were in part outweighed by the reclassification of the Malta Tourism Authority.

The interest component of the public debt servicing costs went down by €1.9 million, from €135.2 million in January-August 2009 to €133.3 million this year.

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