The financial balance of the general government (i.e. the central government, the social security funds and the local governments) is estimated as 161.8 billion ISK in deficit in 2022, equivalent to 4.3% of GDP, compared with a deficit of 272.2 billion ISK in 2021 or 8.4% of GDP.
The general government revenue in current prices increased by 17.3% and the expenditure of the general government decreased by 7.54% from the previous year.
Financial balance for the general government, together with financial assets and liabilities are estimated on the basis of preliminary figures, the results of which will change when the final figures are published in September 2022.
Financial balance continues to decrease in fourth quarter of 2022
The financial balance of the general government is estimated to be negative by 44.9 billion ISK in the fourth quarter of 2022, a deficit equivalent to 4.7% of the quarterly GDP. Overall, the general government revenues are projected to have increased by 19% in the fourth quarter of 2021, while the general government expenditure is estimated to have increased by 8.0%.
General government revenues were 41.8% of GDP
The general government total revenues are estimated to have been 1,574.2 billion ISK in 2022, or 41.8% of GDP. In comparison, in 2021 the general government total revenues amounted to 1.342,5 billion ISK or 41.4% of GDP. This translates to a government revenue increase of 231.7 billion ISK in current prices or 17.3%.
The central government total revenues are estimated to be 1,142.6 billion ISK in 2022, as preliminary figures suggest an increase of 20.3% from the previous year. Local government revenues are estimated to have increased by 10% and amounted to 475.9 billion ISK in 2022. The revenues of the social security funds decreased by 3.8%, to a total of 370 billion ISK in 2022, but 99.5% of the funds are funded through the central government. At central government level, the contributions to the social security funds are categorised as transfers to other levels of government. When general government revenues and expenditures are combined, contributions between government units are adjusted to prevent overestimation of revenues and expenditures.
Statistics Iceland’s treatment of general government accounts is according to the European System of Accounts (ESA2010). The treatment of the sale of assets and income from associated companies and joint ventures differs from the treatment of the Governments Accounts and municipalities. In Statistics Iceland's general government accounts, income from the sale of assets, share of income and changes in the value of assets are only recognised in the balance sheet. Revenues from publicly owned companies are only recognised as income in the form of dividends up to a maximum of the previous year's profit.
Government expenditure at 46.1% of GDP
General government expenditure is estimated at 1,736 billion ISK in 2022, or 46.1% of GDP. In comparison, in 2021 the general government total expenditure amounted to 1,614.7 billion ISK or 49.8% of GDP. Total central government expenditure is estimated at 1,274.7 billion ISK in 2022, an increase of 6.6% from the previous year. Estimated local government expenditure amounts to 519 billion ISK in 2022, an increase of 10.9% from the previous year.
Public consumption expenditure (i.e. wages and salaries, use of goods & services and depreciation, taking into account sales of goods and services) amounted to 975.7 billion ISK or 25.9% of GDP in 2022. An increase of 8.8% compared with the year before.
Preliminary figures suggest that public investment expenditure amounted to 153.9 billion ISK in the year 2022, or 4.1% of GDP. As a percentage of GDP for each year, public investment has increased in recent years and, at current prices, it is estimated that public investment increased by 12.3 billion ISK between 2021 and 2022.
Preliminary figures for 2021 indicate that social transfers to households amounted to 284 billion ISK, a decrease of 7.3% from 2021. In 2021, general government expenditure on social transfers increased by 4% from the previous year.
Estimated general government interest expenditure amounted to 173.6 billion ISK in 2022 and 4.6% as a percentage of GDP, an increase of 50.6 billion ISK compared with the year before.
In 2021, the total government expenditure on health is estimated to have been 282.2 billion ISK, 17,2% of the total net government expenditures. That is an increase of 1.7% from 2021, or 4.6 billion ISK increase.
Government expenditure on education is estimated at 248.4 billion ISK in 2022, or 15.1% of total net government expenditure. In current prices it is an increase of 15.4 billion ISK in 2022, or 6.6%.
Government gross debt stood at 101.1% of GDP in 2022
General government net financial assets are estimated to be negative by 1,367.6 billion ISK at the end of 2022, equivalent to 36.3% of GDP. In comparison, in 2021 the general government net financial assets amounted to negative 1,150.8 billion ISK or 35.5% of GDP.
General government financial assets amounted to 2,440.3 billion ISK at year-end 2022, or 64,7% of GDP. General government total liabilities increased year on year and is estimated as 3,807.9 billion ISK, or 101,1% of GDP. In comparison, in 2021 General government total liabilities amounted to 3,585.9 billion ISK or 110,5% of GDP.
The central government financial assets are estimated as 2,265.9 billion ISK at the end of 2022 which is an increase of 0.2% from the previous year. The central government gross debt is estimated at 3,312.9 billion ISK in 2022, the increase amounts to 169.8 billion ISK from previous year. The estimated gross debt of local governments is 502.2 billion ISK, an increase by 51.8 billion ISK from the year 2021.