Govt´s financial position weakens in Q2

Consolidated total general government revenue at current prices grew in April to June by EUR 1.7 billion and total expenditure by EUR 3.4 billion compared with the corresponding quarter of the year before, according to Statistics Finland.

The difference between revenue and expenditure, that is, the deficit (net borrowing) of general government was EUR 0.1 billion in the second quarter of 2023.

The health and social services reform moved municipalities' tax revenues to central government and increased current transfers from central government to local government.

The financial position of employment pension schemes improved from the quarter of the previous year as social security contributions received and property income increased.

The financial position of other social security funds improved from the quarter of the year before as income transfers and social security contributions received grew.

General government interest income grew more than interest expenses compared with the corresponding quarter one year ago.

Central government non-consolidated total revenue grew by EUR 3.4 billion (18.6%). Non-consolidated total expenditure grew by EUR 4.8 billion (26.8%) from the respective quarter of the year before.

The difference between revenue and expenditure, that is, the net borrowing of central government was EUR 1.4 billion. Income tax received by central government increased most among central government revenue items. The expenditure item that grew most was current transfers paid by central government.

At the beginning of the year, the local government sector was divided into new sub-sectors: local government excl. wellbeing services county administration (S13131) and wellbeing services county administration (S13132).

The change causes a break in the time series of the figures of local government. The health and social services reform particularly impacted the tax revenue received by the local government sectors and current transfers between local government and central government. The data of the new sub-sectors of local government will become revised as new source data improve and in connection with the compilation of annual national accounts for the statistical reference year 2023.

Employment pension schemes’ total revenue grew by EUR 0.9 billion (10.3%) and total expenditure by EUR 0.8 billion (10.0%) from the quarter twelve months back. The revenue items that grew most in monetary terms were social security contributions received and property income. Of the expenditure items, paid social benefits other than social transfers in kind grew most in monetary terms. The surplus of employment pension schemes was EUR 1.0 billion in the second quarter of the year.

Other social security funds’ total revenue increased by EUR 0.4 billion (7.9%) and total expenditure grew by EUR 0.06 billion (1.2%) from the quarter twelve months back. The revenue item that grew most was social contributions received. In addition, current transfers from central government are still at a high level compared to one year ago, but lower than in the previous quarter. The slight increase in expenditure is largely explained by the increase in social transfers in kind. The surplus (net lending) of other social security funds was EUR 0.4 billion.