In the first quarter of 2022, the financial balance of the general government (i.e. the central government, the social security funds and the local governments) is estimated at 20.7 billion ISK in deficit or amounting to 2.4% of quarterly GDP. This is a significant turnaround from the first quarter of 2021, when the deficit amounted to 8.6% of the quarterly GDP.
Overall, general government revenues are estimated to have increased by 17.7% compared with last year’s corresponding quarter, of which the increase in tax revenue was 10.7%. Publicly owned financial companies have agreed to pay dividends in the amount of 27.9 billion ISK in the year 2022 and are recognised as income in the first quarter. This is a large increase from the previous year, when dividend payments from publicly owned financial companies amounted to 7.9 billion ISK.
Total expenditure is estimated to have increased by 3.6% from last year’s corresponding quarter. It is estimated that compensation of employees, which account for 34.3% of total public expenditure, have increased by 8.2%. On the other hand, transfer expenditures are estimated to have decreased by 9.4% and social transfers to households by 8.1% from the first quarter of 2021. The main explanation is that unemployment has decreased considerably and expenditures on unemployment insurance have decreased by 45.9% in the period.