The deficit of the general government (i.e. central government, social security funds and local governments) is estimated at 24.0 billion ISK in the second quarter of 2025, which amounts to 2.0% of quarterly gross domestic product (GDP). In comparison, the deficit in the second quarter of 2024 was 5.8% of the quarterly GDP.
The government finance figures are estimated based on preliminary figures. The results will be revised when the final accounts are available.
General government revenues are estimated to have increased by 7.8% in the second quarter of 2025. Revenues from tax revenues on income and profits increased by 10.7% year-on-year, and revenues from taxes on goods and services increased by 6.7%.
It is estimated that total expenditure of the general government decreased by 0.9% in the second quarter of 2025 compared with the same period last year. Expenditures were significantly higher in the second quarter of 2024 due to seismic activity and volcanic eruptions near Grindavík. Public consumption expenditure continues to rise, with compensation of employees estimated to have increased by 12.1% and expenditure on intermediate consumption by 6.0%. Social transfers to households also show a notable increase, with preliminary data indicating a rise of 10.8%.
The scope of the general government sector, as according to European System of Accounts (ESA2010), includes housing and student loan funds owned by the central government. These funds have a substantial impact on interest income and interest expenditure of the general government. In an explanatory report published on 30 November 2020, and available on Statistics Iceland’s website, the methodological basis for the sector classification is explained.