Home > Statistics > General government financial accounts > Update of the European Manual on Government Deficit and Debt (MGDD[1]) brings changes to general government deficit and debt

Update of the European Manual on Government Deficit and Debt (MGDD[1]) brings changes to general government deficit and debt

The Manual on Government Deficit and Debt was updated towards the end of 2019 and Statistics Finland has begun going through possible needs for revisions in national accounts it has brought. As a result of this, especially debt figures and, to a lesser extent, deficit figures for 2016 to 2019 have been updated.

The most significant change in Finland following the new guidelines is due to the revised instructions on rerouted/rearranged transactions. According to the guidelines, transactions are recorded for general government when they are carried out by a unit in the private sector under the strict and narrow control of general government or when general government in fact bears the economic risk for a private sector unit in these limited transactions through different compensation arrangements.

As a specification it is mentioned in the guidelines that this always only applies to certain transactions made by a private sector unit. However, it is not possible to rearrange all transactions of the unit in the accounts, so if this seems to be occurring, the unit’s sector classification needs to be re-evaluated and it should be considered if the right classification is within general government and not in the private sector.

After consideration, Statistics Finland has come to the conclusion that transactions like these are also carried out in Finland and has therefore decided to classify some transactions into general government under the central government sector. These transactions increase the previously published general government debt relative to GDP for 2018 by 0.37 per cent and the impact on the deficit is very small.

In addition to the revisions made now, minor revisions to the deficit and debt figures may occur later due to the manual update, when Statistics Finland continues implementing the manual guidelines. These needs for change are not expected to be significant. The changes made and possible needs for change will also be reviewed as normal with Eurostat in connection with EDP reporting and the regular dialogue visits to the Member States. These dialogues can still bring changes to the already reported and published figures.

Further information: Lotta Sjöblom, tel. +358 29 551 3342
Email: financial.accounts@stat.fi

[1] https://ec.europa.eu/eurostat/documents/3859598/10042108/KS-GQ-19-007-EN-N.pdf

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Last updated 10.3.2020