VALLETTA, April 20 (Xinhua) -- Malta's deficit shot up to 1.3 billion euros (1.56 billion U.S. dollars) last year, equivalent to just over 10 percent of the country's gross domestic product (GDP), according to figures published on Tuesday by the National Statistics Office.
In 2019, the country posted a budget surplus of over 50 million euros. In 2020, revenues decreased by 378.1 million euros compared to 2019, while expenditure increased by 972.1 million euros, it said.
Commenting on the figures at a press conference, Finance Minister Clyde Caruana said that in spite of these results, there were no plans to increase taxes or introduce new ones, adding that the country's financial situation was sustainable and the economy would continue to grow.
"The biggest mistake we could make is to increase taxes, it would be like pressing the gas pedal while also pulling the handbrake. The economy needs to be sustained, and we need certainty so businessmen can plan on a long-term basis," Caruana said.
He explained that the country's economy was heavily impacted by the pandemic. The budget's deficit is expected to rise to 1.6 billion euros this year due to increased government expenditure and reduced revenues because of COVID-19, he said. The country's debt stood at 6.9 billion euros, equivalent to 54.3 percent of GDP.
Caruana said the deficit is expected to fall to 5.6 percent (0.75 billion euros) next year if economic recovery goes according to plan. The government estimates that the deficit will be reduced to 3.9 percent of GDP by 2023 and will fall below three percent by 2024.
Caruana said that the country's debt was still at sustainable levels and that Malta had one of the lowest debt rates in the European Union.
He said the pandemic costs Malta around five million euros per day (three million euros in state aid and two million euros in losses).
"The government needs to keep providing aid to the economy as not doing so at this stage would be premature," Caruana said, adding that prior to the pandemic, the government had forecasted a surplus. However, the pandemic was expected to cut revenues by 843 million euros and increase spending by one billion euros.
Repatriation flights alone cost 50 million euros, while additional expenses on health care and COVID-related benefits added up to 112 million euros, the minister added. (1 euro = 1.20 U.S. dollar) Enditem
