Govt’s deficit grows by €1.7b in Q3

General government deficit grew by EUR 1.7 billion in July to September 2024 from the previous year, according to Statistics Finland.

Total general government revenue at current prices grew in July to September by EUR 0.1 billion and total expenditure by EUR 1.9 billion compared to the corresponding quarter of the year before.

The difference between revenue and expenditure, that is, the deficit (net borrowing) of general government was EUR 5.7 billion in the third quarter of 2024.

General government tax revenue and tax-like revenue total grew by EUR 0.1 billion from the quarter twelve months back in July to September 2024.

Taxes on production and imports received grew by EUR 0.5 billion, income and capital taxes by EUR 0.2 billion and social contributions received decreased by EUR 0.6 billion from one year ago.

Expenditure was boosted from the year before by risen compensation of employees especially in wellbeing services county administration and by central government investments and growth in pension expenditure.

Central government total revenue at current prices grew by EUR 0.2 billion (0.9%) and total expenditure increased by EUR 1.1 billion (5.3%) from the quarter twelve months back. Because expenditure grew more than revenue, central government's net borrowing at current prices grew by EUR 1.0 billion.

The revenue items that grew most in monetary terms were taxes on products, output at basic prices and current transfers received. Income tax received by central government decreased most among revenue items.

The expenditure items that grew most were current transfers within general government and gross fixed capital formation. The difference between revenue and expenditure, that is, central government net borrowing, was EUR 2.5 billion in the third quarter of 2024.

Local government's total revenue grew by EUR 1.2 billion (10%) and total expenditure by EUR 0.6 billion (4%) from the quarter twelve months back.

Of total revenue, tax revenue and current transfers received grew most in monetary terms. The rise in tax revenue is explained by the fact that tax refunds paid in 2023 are based on the level of taxation in 2022. The expenditure items that grew most in monetary terms were wages and salaries and intermediate consumption.

Employment pension schemes’ total revenue fell by EUR 0.2 billion (-2.2%) and total expenditure grew by EUR 0.6 billion (7.2%) from the quarter twelve months back.

The revenue item that fell most in monetary terms was property 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 directed at pensions.

The financial position of employment pension schemes weakened by EUR 0.8 billion from one year ago, being EUR 20 million in deficit in the third quarter of 2024.

Other social security funds’ total revenue decreased by EUR 0.3 billion (-6.6%) and total expenditure increased by EUR 0.2 billion (4.2%) from the quarter twelve months back.

The revenue item that fell most in monetary terms was social contributions received, which was caused by lowered sickness and unemployment insurance contribution rates at the turn of the year 2024. The expenditure items that grew most in monetary terms were paid social benefits other than social transfers in kind and social transfers in kind.

The deficit (net borrowing) of other social security funds was EUR 0.3 billion.