The financial balance of the general government (i.e. the central government, the social security funds and the local governments) is estimated at 160.8 billion ISK in deficit in 2024, equivalent to 3.5% of GDP. Compared with a deficit of 99.5 billion ISK in 2023 or 2.3% of GDP.
Preliminary figures suggest that the general government revenue in current prices increased by 5.8% and the expenditure of the general government increased by 8.6% 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 2025.
42 billion ISK deficit in fourth quarter of 2024
The financial balance of the general government is estimated to be negative by 42.2 billion ISK in the fourth quarter of 2024, equivalent to 3.6% of the quarterly GDP. In comparison the government deficit was 65.2 billion ISK in the fourth quarter of 2023. The general government revenues are estimated to have increased by 7.1% and the general government expenditure by 2.1% between the fourth quarter of 2023 and 2024.
General government revenues 42.8% of GDP
The general government total revenues are estimated at 1,974.4 billion ISK in 2024, which amounts to 42.8% of GDP. In comparison, the government revenues amounted to 1,866.8 billion ISK in 2023, or 43.0% of that year's GDP. This translates to a government revenue increase of 107.7 billion ISK in current prices or 5.8%.
In preliminary figures for 2024, the Financial Management Authority has reduced revenues due to taxes on income by 14 billion ISK. According to the information received by Statistics Iceland, the explanation is that the assessed revenues collected in 2024 for 2023 turned out to be lower than anticipated and previously published in the 2023 Treasury Accounts. Statistics Iceland attributes this reduction in tax revenues to the appropriate accounting year, the figures for 2023 have therefore been revised.
It is estimated that central government revenues increased by 4.9% from the previous year, amounting to 1,432.9 billion ISK in 2024. Local government revenues are estimated at 610.4 billion ISK, which is a 9.6% increase from the previous year. The revenues of the social security funds increased by 8.2% during the period and are estimated at 411.6 billion ISK in 2024. It should be noted that 99.2% of the social security funds revenues are transfers from 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.
Government expenditure at 46.3% of GDP
General government expenditures are estimated at 2,135.3 billion ISK in 2024, which amounts to 46.3% of GDP. In comparison, expenditures amounted to 1,966.2 billion ISK in 2023, or 45.3% of that year's GDP. Central government expenditures are estimated at 1,572.6 billion ISK in 2024, an increase of 9.8% from the previous year. Local government expenditures are estimated at 633.9 billion ISK in 2024, an increase of 6.5% from the previous year.
Expenditures due to measures taken by the general government in response to earthquakes and volcanic eruptions near the town of Grindavík weigh heavily in the increase in government expenditures in 2024. These measures are recorded under other expenses in the statement of general government operations, except for expenditure due to the protective barriers which are recorded under local government investments.
Government final consumption expenditures (i.e. wage expenditures, use of goods and services and depreciation less sales of goods and services), increased by 8.4% year-on-year and are estimated at 1,176.3 billion ISK in 2024, or 25.5% of GDP. When taking price changes into account, this gives a volume change of 2.5% in government final consumption.
Preliminary figures suggest that general government investment expenditures amounted to 182.5 billion ISK in 2024, or 4.0% of the year's GDP. This is a 3.8% increase from the previous year.
Expenditures on social benefits to households have increased by 10.4% year-on-year and amount to 324.3 billion ISK in 2024, or 7.0% of GDP. It is estimated that general government interest expenditures have decreased by 19.6% from the previous year and amounted to 186.6 billion ISK in 2024, which is 4.0% of GDP.
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 the 30 November 2020, and available on Statistics Iceland’s website, the methodological basis for the sector classification is explained.
Government gross debt 94.1% of GDP at the year-end 2024
General government net financial assets are estimated to have been negative by 1,731.9 billion ISK at the end of 2024, equivalent to 37.5% of GDP. In comparison, in 2023 the general government net financial assets were negative by 1,552.6 billion ISK or 35.8% of GDP.
General government financial assets amounted to 2,613.5 billion ISK at the end of 2024, or 56.6% of GDP. General government total liabilities increased year on year by 6.5% and is estimated at 4,345.4 billion ISK, or 94.1% of GDP. In comparison, in 2023 General government total liabilities amounted to 4,079.5 billion ISK or 94.0% of GDP.
Central government gross debt is estimated at 3,748.6 billion ISK at year-end 2024 or 81.2% of GDP. Estimated gross debt of local governments is 606.3 billion ISK or 13.1% of GDP.