Current Affairs
How were Government finances affected as a result of Covid-19?

The Government has ended the first half of the year with a deficit of 895.6 million euro in the consolidated fund, a significant increase which is close to the 740 million euro over the same period last year. The National Statistics Office remarked that these figures have to be taken in the context of the Covid-19 situation.

National Statistics Office figures for the first six months show that recurrent income stood at 1,819 million euro, a drop of 345 million euro, nearly 16%, when compared to the same period last year. The NSO explained that the biggest reduction was registered in income tax. The drop was spread over other sources including VAT, social security, licences and fines, and Customs.

At the same time, there was an increase of 17% in Government expenditure between January and June, going up to 2,715 million euro. Expenditure on medicines and medical equipment alone increased by nearly 44 million euro. There was also an increase in payment of social security benefits, 13 million euro of which was paid out because of Covid-19. The wage supplement on its own, disbursed by Government to help workers hit by the pandemic, accounted for an expenditure of 154 million euro in public funds up to end June.

The effect of all this was also felt on Government debt which reached 6,376 million euro, an increase of nearly 900 million euro over the same six months of the previous year.