Finance ministry skips key report as government spending spikes 17.5%

The finance ministry has failed to publish its customary Half-Yearly Report after Malta missed the deadline to transpose revised EU fiscal rules into national law.

The independent Malta Fiscal Advisory Council said the government should implement EU Directive 2024/1265 “without further delay”, warning that the country’s Fiscal Responsibility Act remains tied to the EU’s previous fiscal framework.

Malta was required to transpose the directive by 31 December 2025.

The resulting legal mismatch has complicated fiscal reporting and contributed to the ministry’s decision not to issue its assessment of the public finances for the first half of 2026.

In the ministry’s absence, the Fiscal Advisory Council carried out its own review using financial data available up to 31 July.

Its assessment found that government expenditure jumped by 17.5% during the first six months of the year.

The watchdog warned that the deficit could exceed the government’s forecast unless spending growth slows considerably during the remainder of 2026 or government revenue performs better than expected.

The missing report leaves the public without the finance ministry’s mid-year account of how government revenue, expenditure and deficit projections are developing.

The council said the revised EU rules should be incorporated into Maltese law to provide legal certainty and ensure effective scrutiny of the government’s fiscal performance.

It added that it had already offered its assistance to the government in completing the process.