Government spending outpaced income by €203.4 million in the first eight months of 2025, official figures show, marking a sharp turnaround from the €98.6 million surplus recorded during the same period last year.

Data released on Friday by the National Statistics Office reveal that by the end of August, central government debt had risen to €11.138 billion, an increase of €1.09 billion compared to 2024.

Most of the increase in debt came from Malta Government Stocks (€902.1 million), followed by Treasury Bills (€171.0 million), foreign loans (€77.7 million) and Euro coins issued in the name of the Treasury (€4.3 million). 

Recurrent revenue rose to €5.03 billion between January and August, €174.6 million more than in 2024. 

The biggest increases came from social security contributions (€99.1 million), value added tax (€87.1 million) and licences, taxes and fines (€31.9 million). However, revenue from grants fell by €44.6 million, income tax dropped by €28.4 million and miscellaneous receipts by €10.4 million.

Total expenditure reached €5.23 billion, an increase of €476.6 million compared to last year. Most of the rise was due to a €178.3 million jump in spending on programmes and initiatives, including social security benefits (€88.4 million), funding for Church schools (€23.8 million) and Malta’s contributions to the EU (€18.9 million).

Other increases were recorded in personal emoluments (€122.8 million), contributions to government entities (€43.0 million) and operational and maintenance expenses (€39.9 million).

Capital spending stood at €490.0 million, €73.3 million higher than in 2024, with major outlays on the second electricity interconnector (€73.5 million), the RePowerEU initiative (€18.7 million) and investment incentives (€14.9 million). This was partly offset by lower spending on road projects (€23.3 million) and electric vehicle uptake (€21.4 million).

Meanwhile, the cost of servicing public debt climbed to €192.5 million, up €19.3 million over last year.

‘Record debt’ – PN

Reacting to the news, the Nationalist Party slammed the government for the “record debt” warning this spelt “uncertainty for the immediate future and a heavy burden on our children and future generations”.

“This puts the government on course for yet another budget weighed down by the European Union’s Excessive Deficit Procedure – a process which obliges countries in serious financial difficulty to correct their course in the coming years,” the PN said in a statement. 

In April Finance Minister Clyde Caruana had stated that Malta was expected to exit the EU’s excessive deficit procedure sooner than anticipated as debt and deficit had dropped lower than initially projected.

The PN on Friday pointed out that the level of debt means that in just one year the government had generated €1.1 billion in new debt – equivalent to nearly €3 million every single day. 

The Opposition also accused the prime minister of borrowing “more than all previous prime ministers, Labour and Nationalist alike, combined”. 

The interest paid on government borrowing is also at a record level as it now exceeds €192 million, an increase of more than €19 million compared to the previous year.

“This growth in debt comes despite repeated warnings in recent months from various entities, including the Fiscal Advisory Council, which advises the Government on the financial situation, that this level of debt is unsustainable,” the PN said.