National debt skyrockets to €8.4 billion, up by €266 million in first 2 months of year

Malta’s national debt soared by a further 266 million in the first two months of the year, to reach a record 8.4 billion by the end of February, new statistics published by the NSO show.

These latest figures show that since Prime Minister Robert Abela was installed as the head of the government, the island’s debt has increased by a staggering 3.1 billion, rocketing from 5.3 billion in January 2020 to 8.4 billion by February 2022.

The new statistics do not yet include the government’s spending during the month of the elections, including the unprecedented decision to distribute more than 70 million in cash to the electorate, which was posted to voters just two weeks before the polls opened. 

Added electoral spending includes the reported recruitment of hundreds more employees to the state payroll, mostly through government agencies and contractors with lucrative contracts servicing the government. Although still unreported in the financial statistics, this is expected to make a hefty impact on the government’s spending on salaries in the coming months, particularly in Gozo.

According to the latest data, by the end of February, Malta’s debt reached 8.4 billion – an increase of 1,2 billion in 12 months, or 17.1%.

During the first two months of this year, government spending continued to outrun revenue, despite an increase in revenue from income tax and VAT indicating a recovery in the economy after the pandemic, with increased economic activity being generated.

At the same time, government costs fell in January and February, as the outlay of money related to the pandemic was tapered down and capital expenditure was reduced to try to lower the rising deficit. Still, the country had to rely on further borrowing to cover its obligations.

Although official data for the 2021 financial year have not yet been released, the government is expected to register a record yearly deficit of over 10 per cent, more than twice that originally projected by Finance Minister Clyde Caruana in his budget speech.

While the rules on debt and deficit levels for EU member states were relaxed for the duration of the coronavirus pandemic, the bloc’s normally stringent regulations on government finances are expected to come back into force soon, putting states that haven’t begun normalising their systems yet at risk of facing deficit procedures from the EU.

An additional concern is the accelerated inflation that’s expected to hit the economy, as well as people’s pockets, in the coming months, with some analysts predicting price rises may increase at record rates.

Robert Abela has pledged there will be no increase in consumer prices of energy and fuel this year. This means the government will need to borrow hundreds of millions of euros in additional loans to subsidize these commodities and keep the price unchanged.

                           
                               
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Albert Mamo
Albert Mamo
1 month ago

ITS SO UNFORTUNATE, THAT THOSE BLIND VOTERS THAT VOTED LABOUR, ARE OBLIVIOUS TO THE MESS OUR COUNTRY IS IN FINANCIALLY.

I DON’T THINK BOBBY WILL BE DISHING OUT MORE CASH ANY TIME SOON.

PERSONALLY, I SEE (AS A MINTOFF QUOTE) BELT TIGHTENING. GET READY FOR THE LONG HALL AND PEOPLES WAGES SHRINKING AND PENSIONERS CRYING FOR INCREASES THAT WON’T BE AVAILABLE!!!

Mistur
Mistur
1 month ago
Reply to  Albert Mamo

There is one aspect in this analysis that has not been factored in. A large chunk of assets have been sold off. Each CBI passport issued is also affecting the national wealth. If you had a million euros worth of national wealth. This must now be shared with the new citizens. Another horror story is how our idyllic countryside views have become cluttered with empty structures for buyers who never set foot in them and unaffordable to the population at large. A property given for the tourist sector is now being developed partly as luxury apartments. This could not be possible unless the conditions for possession of such land has been altered. Such an alteration in the clause should have been illegal as some of these properties front on the most beautiful seafront. Any reclamation of these assets that have been sold off would bankrupt the country. We now have the Chinese owning a third of Enemalta assets. I remember a quote mentioning somewhere around 45 football grounds of land. Before you know it we will not own our island anymore. The health sector is in dire straits. If not for Mater Dei Hospital, we would not even have a health sector.
The list goes on and on. The rape of the land is everywhere. With food shortage on the horizon we have dealt the farming communities a lethal blow. Imagine what would happen if importation of food would be restricted. Local produce cannot begin to meet with the demand of an ever increasing population.

Last edited 1 month ago by Mistur
Noel Ciantar
Noel Ciantar
1 month ago

Dont worry. You aint seen nothing yet.

The figure of 266 million Euros is in respect of the first two months January and February. Those are essentially the two months before the election was announced.

The biggest spend in the year to date would have happened in March. Besides the Votes Bulk Buying Scheme costing 70 million Euros, there would have been many payments previously due or withheld, but which would have been released in March, including on the completion of several infrastructural projects.

Hence, the real extent of the impact of the general election on the deficit and public debt will only be known once the March and April figures are published, and those figures will probably even include upward revisions of the figures for January and February.

And let us not forget that the Finance Minister has already declared that the war in Ukraine has cost 200 million Euros.

M.Galea
M.Galea
1 month ago

Capcap u ifrah gahan.

Joseph
Joseph
1 month ago

Leave everything in Bobby’s hands,just relax and let go!

C Portelli
C Portelli
1 month ago

Ċapċaplu, Ġaħan!

Raymond Borg
1 month ago

And they voted for all this,NOT ME

saviour mamo
saviour mamo
1 month ago

Let the clowns reign.

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