In the third 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 32.3 billion ISK in deficit or amounting to 3% of quarterly GDP.

Overall, general government revenues are estimated to have increased by 9.8% 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 7.6%, revenues due to taxes on goods and services growing by 10.2% and revenues due to social security contributions growing by 9.3%. It is estimated that other revenues increased by 18.2% from the same period last year, mainly due to significant increase in interest income.

Total expenditure is estimated to have increased by 4.8% from last year’s corresponding quarter. Expenditure due to government final consumption continues to grow, with increase in compensation of employees by 8.8% and use of goods and services by 11.6%. Social benefits are estimated to increase by 7.5%.

On the other hand, other expenses are estimated to have decreased by 11.4% and public investment by 18.6% from the third quarter of 2022.

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 a 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.


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