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General government finances 2008

Statistics Iceland releases now a new issue of Statistical Series. This issue presents the General Government Finances in 2008 and its main focus is on the general government. Similar information is available on its subsectors on the SI website. 

In 2008, the financial balance of the general government was 200 billion ISK in deficit or 13.6% of GDP, which can be compared with a surplus of 5.4% of GDP for 2007 and 6.3% for 2006. The central government debt assumption of 192.2 billion ISK explains largely this large deficit in 2008. Without the debt assumption the deficit was 0.5% of GDP. The total revenue increased by 4.8% from 2007 (or decreased by 6.4% in real terms) at the same time as the total expenditure (excluding the debt assumption) increased by 19.6% or 6.8% in real terms. The deterioration of the central government finances explains largely this adverse result, but the local government finances have shown more unfavorable results, as their turned form a positive financial balance of 0.6% of GDP in 2007 to a negative one of 0.9% of GDP in 2008.

The general government total revenue amounted to 44.3% of GDP in 2008, compared with 47.9% in 2007 and 48.0% in 2006. The general government total expenditure amounted to 57.8% of GDP in 2008 compared with 42.5% in 2007 and 41.7% in 2006. Without the debt assumption the general government total expenditure amounted to 44.8% of GDP in 2008.

In 2008, the total expenditure on health was 9.2% of GDP, of which 82.6% was financed by the general government and the rest by households. The total expenditure on education was 122.4 billion ISK or 8.3% of GDP, of which 91.4% was financed by the general government, and the total general government expenditure on social protection in 2008 was 135 billion ISK or 8.9% of GDP.

The general government net financial asset, i.e. the financial assets less liabilities, was negative at 293.5 billion ISK in 2008 or 19.9% of GDP. The deterioration from 2007 is 307 billion ISK or 20.9% of GDP. The general government total financial asset amounted to 1,128 billion ISK in the end of 2008 and the total liabilities 1,422 billion ISK.

Note that the 300 billion ISK promised equity injection by the central government after the banks were taken over in 2008 and its financing are not included in the financial assets and liabilities of the general government in end of year 2008.

General government finances 2008 - Statistical Series