Charlot Zahra
Government has abandoned its long-vaunted objective of achieving a balanced budget by 2010, and is instead aiming for a balanced budget the year after.
During 2008, GDP grew by 3.0 per cent as against 3.7 in 2007, a reduction of 0.7 per cent over the past year. Government is forecasting that in 2009, the growth rate would slow further down to 2.5 per cent.
Deficit this year has shot up from 1.2 per cent projected in last year’s budget to 2.5 per cent.
Therefore for next year government is forecasting a deficit of 1.7 per cent as against a deficit of 0.2 per cent forecast during last year’s budget speech. For 2010, government is forecasting a deficit of 0.2 per cent as against a surplus 1.0 per cent forecast in last year’s budget. It will only be in 2011 that government would be able to achieve a budget surplus of 1 per cent according to the revised figures.
In 2008, government recurrent expenditure rose by €102.365 million from that estimated last year, including €29 million more in personal emoluments for Mater Dei Hospital staff, €59 million more for programmes including Enemalta subsidies (€44 m), €4.748 million more for Mater Dei contractual services and €5.229 million more for contributions to entities.
On the other hand, government revenue decreased by €26.553 million, with the reductions coming mostly from social security receipts (€8.3 million less due to over-budgeting), licences, taxes and fines (€12.9 million less due to decrease in duty on documents), and other revenue (€24.6 million in EU grants as grants are directly related to execution of projects)
For 2009, a deficit of €98 million is projected as against a deficit of €200 million reached this year. Government expenditure next year will grow from €2.529 million this year to €2.560 million in 2009.
Recurrent expenditure will grow from €2.253 million this year to €2.302 million in 2009, while revenue will increase from €2.385 million this year to €2.551 million in 2009.
