Govt deficit stands at 5.4%, debt at 69.2% relative to GDP 2020

The general government deficit was 5.4 per cent relative to gross domestic product (GDP) in 2020, according to the revised data reported by the Statistics Finland to the Eurostat.

The deficit exceeded the reference values of the European Union’s Stability and Growth Pact, which is three per cent relative to gross domestic product.

The general government EDP debt or consolidated gross debt was 69.2 per cent, relative to gross domestic product at the end of 2020.

The ratio of debt to GDP exceeded the reference value of 60 per cent. In 2020, the EU Commission introduced a general escape clause of the Stability and Growth Pact, which allows a temporary departure from the deficit and debt requirements.

In 2020, general government deficit or net borrowing, according to national accounts, was EUR 12.9 billion. The financial position of the general government weakened by EUR 10 billion from that in the year before.

Compared to 2019, the financial position of the central government weakened the most, by around EUR 10.8 billion, posting an EUR 13.4 billion deficit in 2020. The central government's total revenue decreased by EUR 3.2 billion and total expenditure grew by EUR 7.6 billion. The growth in total expenditure was caused particularly by the increase in income transfers to other sectors. According to preliminary data, the local government sector’s deficit changed to a surplus of EUR 175 million in 2020.

The surplus of social security funds decreased due to a fall in dividend income to around EUR 270 million in 2020, that is, it decreased by around EUR three billion from the corresponding figure of the previous year. The surplus of employment pension schemes decreased to around EUR 430 million and the financial position of other social security funds changed from being in surplus to being around EUR 160 million in deficit in 2020.

The consolidated general government gross debt (EDP debt) amounted to EUR 164.3 billion at the end of 2020. The debt grew by EUR 21.4 billion in 2020. The central government debt grew by EUR 17.6 billion and local government debt by EUR 1.7 billion. The debt of social security funds grew by EUR 2.2 billion. The increase in consolidated items between general government by EUR 96 million contributed to the debt of the entire general government sector, growing by EUR 21.4 billion in 2020. The EDP debt describes general government’s debt to other sectors of the economy and to the rest of the world, and its development is influenced by changes in both the unconsolidated gross debt and the internal general government debt.