The deficit of the general government (i.e. central government, social security funds and local governments) is estimated at 14.8 billion ISK in the third quarter of 2025, which amounts to 1.2% of quarterly gross domestic product (GDP). In comparison, the deficit in the third quarter of 2024 was 4.5% of the quarterly GDP.
General government revenues are estimated to have increased by 7.5% at current prices compared with the third quarter of 2024. Revenues from taxes and social security contributions rose by 8.4%.
Total expenditure of the general government is estimated to have decreased by 0.4% in the third quarter of 2025 compared with the same period in 2024. Expenditures due to wages and purchases of goods and services continued to increase at current prices, while there has been a significant reduction in other transfers which were unusually high in 2024 due to earthquakes and eruptions near Grindavík. Preliminary data also indicate a decline in interest payments and general government investment. Figures will be revised when government final accounts are available.
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.