In the third quarter of 2022, the financial balance of the general government (i.e. the central government, the social security funds and the local governments) is estimated at 53.3 billion ISK in deficit or amounting to 5.3% of quarterly GDP.
Overall, general government revenues are estimated to have increased by 16.7% compared with last year’s corresponding quarter. Increase in tax revenues are significant, with revenues due to taxes on income, profits and capital gains growing by 12.3%, revenues due to taxes on goods and services growing by 13.9% and revenues due to social security contributions growing by 17.6%. It is estimated that other revenues increased by 40.3% from the same period last year, mainly due to significant increase in interest income.
Total expenditure is estimated to have increased by 13.1% from last year’s corresponding quarter. It is estimated that interest expenditures have increased by over 28 billion ISK from the third quarter of 2021. Expenditure due to government final consumption continues to grow, with increase in compensation of employees by 7.9% and use of goods and services by 10.7%.
On the other hand, other expenses are estimated to have decreased by 21.6% and social benefits by 3.2% from the third quarter of 2021. The main explanation is that unemployment has decreased considerably and expenditures due to unemployment insurance have decreased by 47.0% in the period.
The scope of the general government sector, as according to European System of Accounts (ESA2010), include housing- and student loan funds owned by the central government. These funds have substantial impact on interest income and interest expenditure of the general government. In an explanatory report published on the 30th November of 2020, and available on Statistics Iceland’s website, the methodological basis for the sector classification is explained.