The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Government’s fiscal turnaround plans are starting to “bear fruit”, the minister of state for finance yesterday pointing to the almost 50 per cent cut in its first quarter deficit year-over-year.

Michael Halkitis, referring to the Central Bank’s monthly economic report for October, said the Government’s total fiscal deficit narrowed owing to a combination of reduced spending and higher revenue collections.

“Specifically, the deficit was reduced by almost one half, from a level of $144 million to $78 million in the first quarter of this year,” Mr Halkitis said. “The bulk of this $66 million improvement primarily reflected a $58 million reduction in total expenditure, of which $28 million occurred on the recurrent side and $30 million on the capital side.

“Total revenue during the first quarter of the fiscal year 2013-2014 increased by almost $9 million.”

During a brief presentation in Parliament, Mr Halkitis added: “All in all, these are most encouraging developments, and they indicate that the Government’s plans to redress the nation’s public finances are bearing fruit.”

According to the Central Bank’s monthly economic and financial developments for October, domestic economic conditions were “relatively subdued, amid a lacklustre tourism performance, although foreign investment-led construction activity continued to secure a modest growth outcome”.

Provisional data on the Government’s Budget operations for the three months to end-September 2013 showed that the overall deficit narrowed by $66.2 million, or 45.9 per cent, to $78.1 million, reflecting a gain in total revenue of $8.5 million or 2.9 per cent to $305.3 million, and a decline in total spending of $57.8 million or 13.1 per cent to $383.3 million.

“Current expenditures decreased by $27.5 million or 7.5 per cent to $342.1 million, reflecting in part a decrease in subsidies to a local public health authority,” the Central Bank said.

“Capital spending contracted by $32.1 million or 51.5 per cent to $30.2 million, occasioned by a $21.8 million or 45.2 per cent fall-off in capital formation, in line with the reduced level of infrastructural projects.

“However, Government’s budgetary support to public entities grew by a net of $1.9 million or 20.2 per cent to $11.1 million.”