General government deficit 0.8 per cent and debt 73.3 per cent relative to gross domestic product in 2022

General government financial position improved, while debt grew

In 2022, general government deficit, or net borrowing according to national accounts, was EUR 2.1 billion. The financial position of general government improved by nearly EUR five billion from the previous year.

The financial position of central government improved most compared to 2021. Central government deficit amounted to around EUR 4.2 billion, which was about EUR four billion less than in the previous year. The improvement in the financial position of central government was particularly due to a growth in tax revenue. According to revised data, the local government sector’s deficit was around EUR 0.5 billion in 2022.

Social security funds are divided into employment pension schemes and other social security funds. The surplus of social security funds increased to EUR 2.7 billion in 2022 due to a growth in social security contributions received. The surplus of employment pension schemes was around EUR 2.3 billion and that of other social security funds about EUR 0.3 billion.

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Consolidated general government gross debt (EDP debt) amounted to EUR 196.9 billion at the end of 2022. The debt grew by EUR 14.9 billion in 2022. Central government debt grew by EUR 12.3 billion and local government debt grew by EUR 1.7 billion. Debt of social security funds grew by EUR 1.2 billion.

The increase in consolidated items between general government by EUR 349 million contributed to the debt of the entire general government sector growing by said EUR 14.9 billion in 2022. The EDP debt describes general government’s debt to the other sectors of the economy and to the rest of the world, and its development is influenced by changes in both the unconsolidated gross debt and the internal general government debt.

EDP reporting tables, notification in October 2023 (in English only) (PDF)

Eurostat will publish data on Member States on 23 October 2023.

Central government's EDP debt differs as a concept from the central government debt published by the State Treasury

General government surplus/deficit refers to net lending/borrowing according to the sector accounts of national accounts, which is the difference between total revenue and expenditure. For instance, in the case of local government, the concept differs from the surplus/deficit of the accounting period according to the profit and loss accounts of municipalities and joint municipal authorities included in the sector. The key difference concerns investments, which are recorded in national accounts as expenditure as such.

In general government accounts, the European Financial Stability Facility EFSF is, based on Eurostat's decision, handled so that EFSF's borrowing is recorded as part of the gross government debt of the countries that have provided guarantees. The loan received by the beneficiary country from the EFSF is recorded as if it had been received from the countries in the euro area that have provided guarantees and these countries in turn owe the corresponding amount to the EFSF. As a result, the EDP gross debt of the countries that provided guarantees grows but the net debt remains unchanged because the countries have a similar receivable from the beneficiary country.

The gross government debt to be recorded in each country’s general government debt on the loans granted by the EFSF is calculated by dividing the loan granted to the beneficiary country by the contribution key (based on the share in the ECB's capital of each country participating in the support operations).

At the end of 2022, Finland's general government debt includes EUR 3.4 billion of debt granted by the EFSF to beneficiary countries. Corresponding treatment does not apply to the European Stability Mechanism (ESM).

Central government's EDP debt differs as a concept from the central government debt published by the State Treasury. Central government's EDP debt includes loans granted to beneficiary counties by the European Financial Stability Facility EFSF, received cash collateral related to derivative contracts, the capital of the Nuclear Waste Management Fund, debts generated from investments in central government's PPP (public-private partnership) projects, and coins that are in circulation. ARA interest subsidy loans are also included in general government debt.

In National Accounts, central government is also a broader concept than the budget and financial economy. However, the State Pension Fund is classified as a social security fund. The valuation principle for both debt concepts is the nominal value, where the effect of interest-rate contracts and currency swaps is taken into account. When these differences are taken into consideration, we reach the central government non-consolidated gross debt in accordance with the EDP concept (Appendix table 2).

In 2022, the State Treasury's central government debt EUR 141.6 billion + conceptual differences of the debt EUR 4.4 billion + differences caused by the sector delimitation EUR 5.1 billion + differences due to the recording of ARA interest subsidy loans EUR 9.4 billion = central government gross debt EUR 160.6 billion.

The stock of ARA interest subsidy loans added to local government amounted to EUR 6.4 billion. Hence, the impact of the rearrangement of ARA interest subsidy loans on the general government consolidated EDP debt was EUR 15.8 billion.

A list of units belonging to general government and decisions on major sector classification cases (only in Finnish) can be found at: http://www.stat.fi/meta/luokitukset/_linkki/soveltamisp.html.

Finland updated the EDP inventory concerning the compilation of deficit and debt data in connection with the April 2021 release. A new updated methodological description can be found at: http://stat.fi/til/jali/men_en.html)