2017: General Government registered a surplus of €436.6 million, an increase of €335.7 million from the previous year

General Government balance and debt position

A news release published today by the National Statistics Office (NSO) shows that the surplus of General Government for 2017 amounted to around €436.6 million, an increase of €335.7 million from the previous year. The balance is calculated as the difference between total revenue (€4,494.6 million) and total expenditure (€4,057.9 million) of general government. Comparing 2017 over 2016, total revenue increased by €612.6 million, while total expenditure increased by €276.9 million.

When measured as a percentage of GDP, the General Government balance was equivalent to a surplus of 3.9 per cent, an increase of 2.9 percentage points when compared to the surplus registered in 2016.

The General Government nominal gross consolidated debt decreased by €85.8 million to €5,642.6 million over 2016. Together with a higher level of GDP, the debt-to-GDP ratio for 2017 was brought down to 50.8 per cent.

2017 data

In order to arrive at the General Government Sector’s positive balance for 2017 of €436.6 million, adjustments are made to the balance of the Government’s Consolidated Fund (NSO news release 51/2018), which registered a surplus of €182.7 million – an increase over the €8.9 million recorded in 2016. These adjustments are done in order to transform the cash-based data of Government’s Consolidated Fund into an accruals-based exercise compiled in line with the established methodology. The adjustments also take in consideration the Extra Budgetary Units (EBUs) which are classified within the General Government Sector1, as well as the Local Government Sector.

One major positive adjustment is the net lending (or surplus) recorded by EBUs of €240.5 million, an increase of €64.2 million over 2016. The EBU registering the highest surplus was the National Development and Social Fund (NDSF) with €199.7 million, constituting 70 per cent of the contributions under the Individual Investor Programme (IIP). Other positive adjustments to the Government’s consolidated fund include the time-adjusted cash transactions (€35.2 million), as well as the Treasury Clearance Fund (TCF) flows in non-financial transactions (€37.2 million). In contrast, the main negative adjustments include the ‘other accounts receivable and payable’ (€53.3 million) and other financial transactions (€11.5 million).

Reporting and Updates

On 29 March, Malta submitted its report on government deficit and debt levels for the years 2014-2017. This was done in accordance with Council Regulations (EC) No. 479/2009, as amended by Commission Regulation (EU) No. 220/2014, as well as in accordance with the Code of Best Practice adopted by the ECOFIN council on18 February 2003.

When compared to the previous submission of 29 September 2017, the balance of the General Government was revised for all the years under review with an improvement in the deficit of €0.3 million for 2014 and a downward revision of €0.1 million for 2015. The General Government surplus for 2016 was revised downwards by €11.9 million.

The revisions for 2014 and 2015 were a result of the availability of audited accounts for EBUs and for Local Councils. For 2016, the availability of audited accounts for EBUs resulted in a downward revision of €7.1 million. Concurrently, the ‘other accounts receivable and payable’ was revised downwards by €4.8 million.

With regard to General Government debt, data for 2014 and 2015 was revised downwards by €5.0 million for both years while data for 2016 was revised upwards by €0.5 million.

Stock Flow Adjustment (SFA)

Astock flow adjustment of 3.2 per cent of GDP was recorded in 2017 suggesting that the debt decreased less than implied by the recorded surplus of 3.9 per cent of GDP and thus, the change in government debt is also attributable to other elements. The fall in General Government debt was mainly the result of an increase of 1.5 per cent of GDP in ‘other accounts receivable and payable’, together with an increase in the holdings of ‘equity and investment fund shares’ (0.8 per cent of GDP) and ‘currency and deposits’ (0.6 per cent of GDP).

Further information

The data presented in this release is different from the monthly news releases on government finance as the latter is limited to the Government’s Consolidated Fund and is presented on a cash basis. This exercise is compiled in line with the European System of Accounts (ESA) 2010 and the Manual on Government Deficit and Debt (2016 edition). It covers the General Government Sector; made up of the Budgetary Central Government, the Extra Budgetary and the Local Government sector. Apart from the Consolidated Fund, other accounts of Government such as Treasury Clearance and Sinking Funds are included, while any financial transactions are excluded and various accruals adjustments are taken on board.

Data for the Government’s Consolidated Fund is found at: https://nso.gov.mt/en/News_Releases/View_by_Unit/Unit_A2/Public_Finance/Pages/Government-Finance-Data.aspx

More information on the revenue and expenditure categories, as well as the financial assets and liabilities and debt was published today in the News Release ‘Quarterly Accounts for the General Government Sector: 2017Q4’. It can be accessed at:

https://nso.gov.mt/en/News_Releases/View_by_Unit/Unit_A2/Public_Finance/Pages/Quarterly-Accounts-for-General-Government.aspx

The official EDP notification tables that are transmitted to the Commission can be found in the excel version of this news release at:

https://nso.gov.mt/en/News_Releases/View_by_Unit/Unit_A2/Public_Finance/Pages/General-Government-Balance-and-Debt-under-the-Maastricht-Treaty.aspx

The EDP Consolidated Inventory of Sources and Methods in ESA 2010 is available on the NSO website. The document may be accessed at: https://nso.gov.mt/en/nso/Sources_and_Methods/Unit_A2/Public_Finance/Pages/General-Government-Balance-