Landshagir - 01.11.2010, Síða 287

Public finance
LANDSHAGIR 2010 STATISTICAL YEARBOOK OF ICELAND 2010
15
287
Statistics Iceland compiles the annual
general government, central govern­
ment, and local government statistics,
on an accrual basis, in the context of the
national accounts based on the 1995 ESA
and the ESA95 Manual on Government
Deficit and Debt. The government sector
comprises those activities in the economy
that are mainly financed by tax revenue.
One of the main purposes of keeping
accounts of the general government is to
give an overview of its revenue, expendi­
ture, assets and liabilities and of its main
balances, i.e. the operating balance and
net lending/borrowing balance. The
accounts are produced in line with the
IMF‘s GFSM 2001 standard on the govern­
ment finances (The Government Finance
Statistics Manual, 2001), the European
System of Accounts from 1995 (ESA95)
and the Classification of the Functions of
Government (COFOG) issued by the United
Nations. The accounts are produced for
the general government as well as for its
subsectors, i.e. budgetary central govern­
ment, social security funds and local
governments.
Financial balance deficit
In 2009, the financial balance of the
general government was 149 billion ISK
in deficit or 9.9% of GDP, which can be
compared with a deficit of 13.5% of GDP
for 2008 (or 0.6% of GDP excluding the 192
billion ISK debt assumption) and a surplus
of 5.4% for 2008. This adverse develop­
ment in 2009 can mainly be explained by a
41 billion ISK decrease in tax revenue, a 49
billion ISK increase in interest payments,
a 32 billion ISK increase in social contri­
butions (due to e.g. higher unemploy­
ment rate) and a 27 billion ISK increase in
government final consumption (despite a
1.7% decrease in value terms).
Total revenue decreased
The general government total revenue
amounted to 40.9% of GDP in 2009,
compared with 44.2% in 2008 and 47.9%
in 2007, and has therefore decreased
considerably in recent years measured as
percentage of GDP. The general govern­
ment total expenditure amounted to
50.9% of GDP in 2009 compared with 57.8%
in 2008 and 42.5% in 2007. Excluding the
192 billion ISK debt assumption in 2008,
the total expenditure increased by 102
billion ISK between 2008 and 2009.
Education, health and social protection
account for the largest share of government
expenditure
Of the general government total expendi­
ture 55.3% were spent on education, health
and social protection or 422 billion ISK.
A total of 98.6 billion ISK were spent on
interest cost or 12.9% of the total expendi­
ture and on economic affairs 90.2 billion
ISK or 11.8% of the expenditure, of which
46 billion ISK were spent on transport
and 15 billion ISK on agriculture. In total,
80% of the government expenditure were
spend on these functions.
Financial asset deterioration
The general government net financial
asset, i.e. the financial assets less liabili­
ties, was negative by 597 billion ISK in
2009 or 39.8% of GDP. The deterioration
from 2009 was 221 billion ISK or 14.1% of
GDP. The general government total finan­
cial asset amounted to 1,197 billion ISK at
the end of 2009 and total liabilities were
1,794 billion ISK.