Govt´s financial position weakens by €2.9b in Q3

General government's consolidated total revenue decreased by EUR 0.6 billion in the third quarter of 2020 compared with the corresponding quarter of the previous year, according to Statistics Finland.

Consolidated total expenditure increased by EUR 2.3 billion from the previous year’s corresponding quarter.

The difference between revenue and expenditure, that is, the net borrowing of general government grew by EUR 2.9 billion from the respective quarter of the year before.

Compared to the second quarter of 2020, seasonally adjusted income decreased less than seasonally adjusted expenditure, that is, the financial position of general government no longer worsened in the third quarter of 2020 from the previous quarter.

In the third quarter of 2020, general government deficit (net borrowing) stood at EUR 5.1 billion.

The coronavirus crisis increased expenditure and decreased income significantly in the third quarter of 2020 compared with the corresponding quarter of the year before.

In the third quarter, central government's total revenue amounted to EUR 12.7 billion and total expenditure was EUR 16.7 billion. Central government's total revenue went down by 5.0 per cent from the respective quarter of the year before.

Income tax paid by corporations was the single biggest contributor to the fall in tax revenue. This was both due to a decrease in advance taxes paid by non-financial corporations and to a transfer of 10 percentage points of the distribution share of corporation tax from central government to municipalities.

Of taxes on production and imports, profits from gambling activities and motor vehicle and motorcycle tax declined most.

Total expenditure increased by 15.6 per cent from the respective quarter of the year before. The expenditure items that grew most were subsidies paid and current transfers paid to general government. The difference between revenue and expenditure, that is, the central government deficit was EUR 4.0 billion in the third quarter.

Local government's total revenue was EUR 12.0 billion in the third quarter. Compared to the corresponding quarter of the previous year it grew 11.7 per cent. Of income, most increase was recorded in income transfers from central government.

These data are based on the data sources available by 11 December 2020.