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In 2022, the General Government registered a deficit of €982.2 million, equivalent to 5.7 per cent of GDP. The General Government debt amounted to €9,000.5 million or 52.3 per cent of GDP.

General Government balance and debt position

The deficit of General Government for 2022 amounted to €982.2 million, an improvement of €158.6 million over the deficit recorded in the previous year. The balance is calculated as the difference between total revenue (€5,882.6 million) and expenditure (€6,864.8 million) of General Government. When comparing 2022 to 2021, total revenue increased by €445.8 million, while total expenditure increased by €287.2 million.

2022 data

In order to arrive at the General Government sector’s negative balance for 2022 of €982.2 million, adjustments were made to the balance of the Government’s Consolidated Fund, which registered a deficit of €900.3 million, an improvement of €332.2 million over the deficit recorded in 2021. The adjustments are necessary to shift from the Government’s Consolidated Fund into an accruals-based exercise compiled in line with the established methodology. The adjustments also take into consideration the Extra Budgetary Units (EBUs), which are classified within the General Government sector, as well as the Local Government sector. 

The largest negative adjustment was related to Other accounts receivable and payable which amounted to €352.7 million, which includes amongst others the Treasury Department accruals data, the EU Funds neutralisation adjustments and the COVID-19 tax deferrals. Other negative adjustments were the rerouted transactions inside the General Government sector and public-private partnership (PPP) agreements (€13.1 million) and the Treasury Clearance Funds (TCF) in non-financial transactions (€7.1 million).

On the other hand, the main positive adjustments included the time-adjusted cash transactions (€167.9 million) and an increase in the surplus recorded by the EBUs which stood at €95.7 million, marking an increase of €10.2 million over 2021. Other increases were the new recording for payable tax credits (€24.3 million), the interest received from the sinking fund (€4.8 million) and the Local Government aggregated surplus of €2.8 million.

Reporting and updates

On 29 September 2023, Malta submitted the government deficit and debt levels for the years 2019-2022, as part of the Excessive Deficit Procedure (EDP) Notification. This was done in accordance with Council Regulation (EC) No. 479/2009, as amended by Commission Regulation (EU) No. 220/2014.

When compared to the previous submission of 30 March 2023, the balance of the General Government was revised for all the years under review following changes in the Other accounts receivable and payable category, which includes the shift to the time-adjusted cash method for the recording of emission trading schemes. These revisions had a positive impact on the fiscal balance in 2019 (€2.1 million) and 2021 (€19.9 million), and a negative impact in 2020 (€12.3 million) and 2022 (€22.5 million). Additionally, the availability of audited financial statements for EBUs and local councils led to an upward revision in the fiscal balance by €0.4 million in 2020, €15.1 million in 2021, and €21.4 million in 2022.

The downward revision in General Government debt in 2022 by €2.9 million resulted from the availability of audited accounts for EBUs and Local Government.

Stock-Flow Adjustment (SFA)

The SFA, also referred to as the deficit-debt adjustment, captures those transactions or factors that influence government debt but are not reflected in the government fiscal balance. A SFA of -1.4 per cent of GDP was recorded in 2022. This suggests that the deficit of 5.7 per cent of GDP increased by more than implied by the change in government debt of 4.3 per cent of GDP. The SFA was mainly the result of decreases in Other accounts receivable and payable (1.9 per cent of GDP) and Other adjustments (0.3 per cent of GDP). These were partly offset by increases in the holdings of Debt securities (0.4 per cent of GDP), as well as the holdings of Currency and deposits (0.2 per cent of GDP) and Equity and investment fund shares (0.1 per cent of GDP).

Further information

The data in this release is presented on an accrual basis, as opposed to the monthly news release on government finances, which reflects the Government’s Consolidated Fund and is presented on a cash basis. This exercise is compiled in accordance with the Manual on Government Deficit and Debt and the European System of Accounts (ESA) 2010 (2023 edition). It covers the General Government sector, which includes the Local Government, Extra Budgetary Units, and Budgetary Central Government. Other government accounts, such as the Treasury Clearance Fund and the Sinking Fund, in addition to the Consolidated Fund, are included. Financial transactions are excluded, and other accrual adjustments are taken into account.

ARTICLE WRITTEN BY NSO

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