In the first quarter of 2023, the financial balance of the general government (i.e. the central government, the social security funds and the local governments) is estimated at 21 billion ISK in deficit or amounting to 2.1% of quarterly GDP. In comparison, the deficit- amounted to 2.3% of the quarterly GDP in the first quarter of 2022.

General government revenues are estimated to have increased by 11.8% compared with last year’s corresponding quarter, mainly driven by 15.1% increase in revenues from taxes and social security contribution.

Total expenditure is estimated to have increased by 11.6% from last year’s corresponding quarter. Interest expenditures are believed to have increased by 46.2% from the first quarter of 2022, which is explained in part by deteriorating credit terms. It is estimated that compensation of employees increased by 6.4%, use of goods and services by 9.4% and public investment by 19.7%.