Malta’s government deficit nearly doubled in 2025 as spending increased at a significantly faster pace than revenue, according to newly published data by the National Statistics Office.

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The deficit reached €823.9 million, up from €432.7 million in 2024, reflecting a widening gap between government income and expenditure.

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The deterioration was driven primarily by a sharp rise in spending. Total government expenditure climbed to €8.90 billion, an increase of €603.5 million (+7.3%) year-on-year.

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In contrast, total revenue rose more modestly to €8.07 billion, up €212 million (+2.7%).

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This imbalance — with spending growth nearly three times higher than revenue growth — was the key factor behind the widening deficit.

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Recurrent expenditure accounted for the bulk of the increase, rising by €595 million to €7.49 billion. The largest increases were recorded under programmes and initiatives, government contributions to entities, public sector wages and operational expenses.

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Social protection remained the largest spending category, with social security benefits alone increasing by €142.7 million, reflecting continued pressure from welfare and support schemes.

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Additional increases were recorded in EU contributions and energy-related measures, including investments in battery storage systems.

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Interest payments on government debt also rose to €296.6 million, up €35.2 million year-on-year.

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Capital expenditure declined slightly overall, falling by €27 million to €1.11 billion. However, this masked a mixed picture, with increased investment in projects such as the electricity interconnector and EU-backed initiatives, offset by lower spending on roads and energy infrastructure.

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On the revenue side, gains were driven mainly by higher social security contributions, VAT receipts and licence-related income.

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However, some key revenue streams declined. Income tax fell by €50.5 million, while grants decreased by €97.2 million, limiting overall revenue growth.

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The rise in the deficit has contributed to an increase in government debt, which reached €11.36 billion by the end of 2025 — an annual increase of €892.8 million.

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The data suggests that the government is continuing to finance its fiscal gap primarily through borrowing, with Malta Government Stocks accounting for the largest share of new debt issuance.

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Overall, the figures point to growing structural pressure on public finances, with spending on social programmes, wages and support measures continuing to rise faster than government revenues.

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