General government’s deficit grew by EUR 1.0 billion in July to September 2023 from one year ago

Current transfers paid by central government to local government and income tax revenue increased in the early part of 2023

Central government non-consolidated total revenue grew by EUR 3.6 billion (23.9%) and non-consolidated total expenditure increased by EUR 3.3 billion (20.4%) from the quarter twelve months back. The revenue item that grew most in monetary terms was central government tax revenue and the expenditure item that increased most was current transfers from central government to wellbeing services counties. The difference between revenue and expenditure, that is, central government net borrowing, was EUR 1.2 billion in the third quarter of 2023.

The health and social services reform changed local government financing by increasing current transfers paid by central government to local government and correspondingly decreasing the tax revenue received by local government, starting from the first quarter of 2023.

The data on central government became revised especially as concerns current transfers between central and local government, intermediate consumption and investments.

Local government's total expenditure grew and total revenue declined

Local government's total expenditure grew and total revenue decreased from the respective quarter of the year before. Intermediate consumption and compensation of employees increased most in monetary terms. The development in total revenue is explained by the decrease in tax revenue received by local government sectors and the current transfers made by central government to wellbeing services counties being concentrated to the first two quarters of 2023.

From the beginning of 2023, the local government sector has been divided into new sub-sectors: local government excl. wellbeing services county administration (S13131) and wellbeing services county administration (S13132). The change causes a break in the time series of the figures of local government. The data of the new sub-sectors of local government will become revised as new source data improve and in connection with the compilation of annual national accounts for the statistical reference year 2023.

Employment pension schemes' total revenue grew

Employment pension schemes’ total revenue grew by EUR 1.0 billion (12.3%) and total expenditure by EUR 0.7 billion (9.0%) from the quarter twelve months back. The revenue items that grew most in monetary terms were social security contributions received and property income. The growth in property income is particularly explained by increased interest income. The expenditure item that grew most in monetary terms was paid social benefits other than social transfers in kind, the rapid growth of which is due to substantial index increases. The surplus (net lending) of employment pension schemes was EUR 1.0 billion in the third quarter.

Other social security funds’ revenue grew

Other social security funds’ total revenue increased by EUR 0.3 billion (6.1%) and total expenditure grew by EUR 0.15 billion (3.1%) from the quarter twelve months back. The revenue item that grew most was social contributions received. In addition, current transfers from central government are still high compared to one year ago, but lower than in the previous quarter. The increase in expenditure is largely explained by the increase in social allowances other than social transfers in kind. The surplus (net lending) of other social security funds was EUR 0.17 billion.