General government deficit 2.7 per cent and debt 72.4 per cent relative to GDP in 2021

In 2021, general government deficit, or net borrowing according to national accounts, was EUR 6.8 billion. The financial position of general government improved by EUR 6.4 billion from the previous year. Compared to 2020, the financial position of central government improved most. In 2021, central government deficit amounted to good EUR eight billion, which was around EUR five billion less than in the previous year. The improvement in the financial position of central government was particularly due to a growth in tax revenue. According to preliminary data, the local government sector’s deficit was good EUR 500 million in 2021.

Social security funds are divided into employment pension schemes and other social security funds. The surplus of social security funds increased considerably due to, among other things, a growth in dividend income, to EUR two billion in 2021, that is, it increased by nearly EUR two billion from the previous year. The surplus of employment pension schemes grew to EUR 2.2 billion and the financial position of other social security funds was still in deficit (EUR 221 million) in 2021.

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Consolidated general government gross debt(EDP debt) amounted to EUR 181.9 billion at the end of 2021. The debt grew by EUR 4.0 billion in 2021. Central government debt grew by EUR 4.2 billion and local government debt grew by EUR 1.0 billion. The debt of social security funds decreased by EUR 0.9 billion. The increase in consolidated items between general government by EUR 258 million contributed to the debt of the entire general government sector growing by said EUR 4.0 billion in 2021. The EDP debt describes general government’s debt to the other sectors of the economy and to the rest of the world, and its development is influenced by changes in both the unconsolidated gross debt and the internal general government debt. 

A methodological change was made to the compilation of statistics on general government debt in summer 2022, as a result of which ARA interest subsidy loans will in future be presented in general government debt and also in financial assets. The EDP debt of general government in 2021 is now EUR 15.5 billion higher than in the April 2022 release. Due to the methodological change connected to ARA interest subsidy loans, general government EDP debt was EUR 14.9 billion higher and the rest of the change was caused by other revisions of data. Central government’s share of ARA interest subsidy loans was EUR 9.0 billion and that of local government EUR 6.0 billion. Further information about the methodological change to ARA interest subsidy loans can be found in the revision release: https://www.stat.fi/en/revisionrelease/cl4wd9qcoqezr0bvwlrq28hxt

EDP reporting tables, October 2022 notification, (pdf).

Eurostat will publish preliminary deficit and debt data on Member States on 21 October 2022.

About the content and concepts of the statistics

General government surplus/deficit refers to net lending/borrowing according to the sector accounts of national accounts, which is the difference between total revenue and expenditure. For instance, in the case of local government, the concept differs from the surplus/deficit of the accounting period according to the profit and loss accounts of municipalities and joint municipal authorities included in the sector. The key difference concerns investments, which are recorded in national accounts as expenditure as such.

In general government accounts, the European Financial Stability Facility EFSF is, based on Eurostat's decision, handled so that EFSF's borrowing is recorded as part of the gross government debt of the countries that have provided guarantees. The loan received by the beneficiary country from the EFSF is recorded as if it had been received from the countries in the euro area that have provided guarantees and these countries in turn owe the corresponding amount to the EFSF. As a result, the EDP gross debt of the countries that provided guarantees grows but the net debt remains unchanged because the countries have a similar receivable from the beneficiary country. The gross government debt to be recorded in each country’s general government debt on the loans granted by the EFSF is calculated by dividing the loan granted to the beneficiary country by the contribution key (based on the share in the ECB's capital of each country participating in the support operations).

At the end of 2021, Finland's general government debt includes EUR 3.4 billion of debt granted by the EFSF to beneficiary countries. Corresponding treatment does not apply to the European Stability Mechanism (ESM).

Central government's EDP debt differs as a concept from the central government debt published by the State Treasury. Central government's EDP debt includes loans granted to beneficiary counties by the European Financial Stability Facility EFSF, received cash collateral related to derivative contracts, the capital of the Nuclear Waste Management Fund, debts generated from investments in central government's PPP (public-private partnership) projects, and coins that are in circulation. In future, ARA interest subsidy loans will also be presented in general government debt. In National Accounts, central government is also a broader concept than the budget and financial economy. However, the State Pension Fund is classified as a social security fund. The valuation principle for both debt concepts is the nominal value, where the effect of currency swaps is taken into account. When these differences are taken into consideration, we reach the central government non-consolidated gross debt in accordance with the EDP concept (Appendix table 2). In 2021, the State Treasury's central government debt EUR 128.7 billion + conceptual differences of the debt EUR 6.5 billion + differences caused by the sector delimitation EUR 4.2 billion + differences due to the methodological change to ARA interest subsidy loans EUR 9.0 billion = central government gross debt EUR 148.3 billion. The valuation principle for both debt concepts is the nominal value, where the effect of interest-rate contracts and currency swaps is taken into account.

A list of units belonging to general government and decisions on major sector classification cases (only in Finnish) can be found at https://www.tilastokeskus.fi/meta/luokitukset/_linkki/soveltamisp.html

Finland updated the EDP inventory concerning the compilation of deficit and debt data in connection with the April 2021 release. The methodological description can be found at https://stat.fi/til/jali/men.html