The financial balance of the general government (i.e. the central government, the social security funds and the local governments) is estimated as 86.7 billion ISK in deficit in 2023, equivalent to 2% of GDP. Compared with a deficit of 155.3 billion ISK in 2022 or 4% of GDP.
The general government revenue in current prices increased by 11.8% and the expenditure of the general government increased by 7% from the previous year.
General government financial balance along with financial assets and liabilities are estimated based on preliminary figures. The figures will be revised in September 2024.
Statistics Iceland will update the population figures for Iceland on March 21. Public finance tables with figures per capita will be updated simultaneously.
Financial balance positive in fourth quarter of 2023
The financial balance of the general government is estimated to be positive by 5.9 billion ISK in the fourth quarter of 2023, equivalent to 0.6% of the quarterly GDP. Overall, the general government revenues are projected to have increased by 26.9% in the fourth quarter of 2023, while the general government expenditure is estimated to have increased by 9.6%.
General government revenues 43.1% of GDP
The general government total revenues are estimated to have been 1,844 billion ISK in 2023, or 43.1% of GDP. In comparison, the general government total revenues amounted to 1,649.7 billion ISK in 2022 or 42.5% of GDP. This translates to a government revenue increase of 194.3 billion ISK in current prices or 11.8%.
The central government total revenues are estimated to be 1,352.2 billion ISK in 2023, an increase of 11.2% from the previous year. Local government revenues are estimated to have increased by 13.6% and amounted to 547.2 billion ISK in 2023. The revenues of the social security funds increased by 3.7%, to a total of 387.4 billion ISK in 2023, 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 45.1% of GDP
General government expenditure is estimated at 1,930.7 billion ISK in 2023, or 45.1% of GDP. In comparison, in 2022 the general government total expenditure amounted to 1,805 billion ISK or 46.5% of GDP. Total central government expenditure is estimated at 1,407.3 billion ISK in 2023, an increase of 5.5% from the previous year. Estimated local government expenditure amounted to 589.9 billion ISK in 2023, an increase of 10% from the previous year.
Final consumption expenditure (i.e. wages and salaries, use of goods & services and depreciation, taking into account sales of goods and services) amounted to 1,098.4 billion ISK or 25.7% of GDP in 2023. An increase of 10.4% compared with the year before. It is estimated that wages increased by 9% from the year 2022.
Preliminary figures suggest that public investment expenditure amounted to 165.4 billion ISK in the year 2023, or 3.9% of GDP. As a percentage of the year's GDP, the public investment expenditure has decreased slightly and is comparable with the public investment expenditure of the year 2020.
Preliminary figures for 2023 indicate that social transfers to households amounted to 293.8 billion ISK, an increase of 3.8% from 2022. In 2022, general government expenditure on social transfers decreased by 7.6% from the previous year. General government interest expenditure is estimated at 214 billion ISK in 2023, a 4.2% decrease from the previous year.
In 2023, the government expenditure on health is estimated to have been 343 billion ISK, which amounts to 18.8% of the total net government expenditures. That is an increase of 8.8% from 2022, or 27.8 billion ISK increase.
Government expenditure on education is estimated at 274 billion ISK in 2023, or 15% of total net government expenditure. In current prices it is an increase of 28.3 billion ISK from 2022, or 11.5%.
Government gross debt 95.9% of GDP at the year-end 2023
General government net financial assets are estimated to have been negative by 1,322.1 billion ISK at the end of 2023, equivalent to 30.9% of GDP. In comparison, in 2022 the general government net financial assets amounted to negative 1,370.3 billion ISK or 35.3% of GDP.
General government financial assets amounted to 2,783.3 billion ISK at year-end 2023, or 65% of GDP. General government total liabilities increased year on year and is estimated as 4,105.4 billion ISK, or 95.9% of GDP. In comparison, in 2022 General government total liabilities amounted to 3,869.2 billion ISK or 99.7% of GDP.
The central government gross debt is estimated at 3,536.2 billion ISK in 2023, the increase amounts to 177.7 billion ISK from previous year. The estimated gross debt of local governments is 573.8 billion ISK, an increase by 58.6 billion ISK from the year 2022.