Govt’s deficit grows by €1b in Q3

Consolidated total general government revenue at current prices grew in July to September 2023 by EUR 1.6 billion and total expenditure by EUR 2.5 billion compared to the corresponding quarter of the previous year, according to Statistics Finland.

The difference between revenue and expenditure, that is, the deficit (net borrowing) of general government was EUR 3.1 billion in the third quarter of 2023.

General government’s financial position weakened from one year ago and improved from the previous quarter.

The financial position of local government weakened from one year ago and from the previous quarter.

The financial position of central government improved from one year ago and weakened from the previous quarter.

Employment pension schemes' total revenue grew more than expenditure compared with the quarter twelve months back.

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

Central government non-consolidated total revenue grew by EUR 3.6 billion (23.9%) and non-consolidated total expenditure increased by EUR 3.3 billion (20.4%) from the quarter twelve months back.

The revenue item that grew most in monetary terms was central government tax revenue and the expenditure item that increased most was current transfers from central government to wellbeing services counties.

The difference between revenue and expenditure, that is, central government net borrowing, was EUR 1.2 billion in the third quarter of 2023.

The health and social services reform changed local government financing by increasing current transfers paid by central government to local government and correspondingly decreasing the tax revenue received by local government, starting from the first quarter of 2023.

Local government's total expenditure grew and total revenue decreased from the respective quarter of the year before.

Intermediate consumption and compensation of employees increased most in monetary terms. The development in total revenue is explained by the decrease in tax revenue received by local government sectors and the current transfers made by central government to wellbeing services counties being concentrated to the first two quarters of 2023.

Employment pension schemes’ total revenue grew by EUR 1.0 billion (12.3%) and total expenditure by EUR 0.7 billion (9.0%) from the quarter twelve months back.

The revenue items that grew most in monetary terms were social security contributions received and property income.

The growth in property income is particularly explained by increased interest income. The expenditure item that grew most in monetary terms was paid social benefits other than social transfers in kind, the rapid growth of which is due to substantial index increases. The surplus (net lending) of employment pension schemes was EUR 1.0 billion in the third quarter.

Other social security funds’ total revenue increased by EUR 0.3 billion (6.1%) and total expenditure grew by EUR 0.15 billion (3.1%) 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 high compared to one year ago, but lower than in the previous quarter.

The increase in expenditure is largely explained by the increase in social allowances other than social transfers in kind. The surplus (net lending) of other social security funds was EUR 0.17 billion.