Municipalities’ operating costs rise 0.3% in H1

The external operating expenses of municipalities in mainland Finland went up by 0.3 per cent to EUR 7.9 billion in the first half of 2020 from the corresponding figures of the same period one year earlier, according to the Statistics Finland.

Their expenses, however increased by 0.2 per cent compared to that in the corresponding period of the previous year.

External operating revenue decreased by 2.4 per cent. Municipalities’ tax revenue totalled EUR 11.7 billion and central government transfers to local governments EUR 5.1 billion.

The external operating expenses of joint municipal authorities grew by 0.2 per cent, while their operating revenue decreased by 3.4 per cent.

The external operating expenses of municipalities in mainland Finland totalled EUR 19.2 billion in the first half of 2020.

External operating revenue amounted to EUR 3.3 billion. The effects of the coronavirus epidemic were visible in municipalities' operational economy, at least as a decrease in operating revenue.

The epidemic has had both a decreasing and increasing impact on operating expenses.

Municipalities received EUR 11.7 billion in tax revenue in January to June this year, which was 1.3 per cent less than that in the same period of the previous year.

The central government’s transfers received by municipalities grew by 14.3 per cent to EUR 5.1 billion. The annual contribution margin grew by EUR 0.3 billion to EUR 1.4 billion.

Tax revenues reduced partly due to payment arrangements and postponements of payments to alleviate the effects of the coronavirus epidemic. The state compensates municipalities for the delayed tax revenue caused by these measures by increasing central government’s transfers to municipalities in 2020 starting from May.

During the first half of 2020, municipalities had EUR 1.7 billion in investment expenses. Compared with the previous January to June period, the growth was 13.8 per cent. The loan stock grew by 2.4 per cent over the past three months to stand at EUR 19.6 billion at the end of June. The loan stock was EUR 3,570 per capita.