Home > Statistics > General government deficit and debt > 2006 > Description of tables published in the EMU deficit and debt statistics

Description of tables published in the EMU deficit and debt statistics

General

Twice a year Statistics Finland compiles statistical data into a report for the EU Commission. These data are used in evaluating the public finances of member states. These reports are a part of the so called excessive deficit procedure (EDP). The data are also used in connection with the EU Stability and Growth Pact (SGP). The projections for the current year included in the report are estimates of the Ministry of Finance. Statistics Finland publishes, in addition to the actual deficit and debt report (EDP report) also seven annexed tables, whose data corresponds to the data included in the report. This document outlines the data contents of those tables.

Link to the tables

Table "General government EMU deficit"

The table contains a time series since 1975 depicting the Finnish general government EMU deficit at the level of total general government and by sub-sector. The data is given both as absolute figures and as GDP ratios. The data corresponds to the data in the EDP notification tables 1 and 2A-2D.

Table "General government EMU debt"

The table contains a time series since 1975 depicting the Finnish general government EMU debt at the level of total general government and by sub-sector. The data is given both as absolute figures and as GDP ratios. The data corresponds to the data in the EDP notification tables 1 and 3A-3E.

Table "General government gross debt and EMU debt"

The table contains a time series since 1995 depicting the Finnish general government gross debt and EMU debt. The general government EMU debt, i.e. general government debt to other sectors of the economy and to foreign countries, can be calculated on the basis of the gross debt by deducting internal general government debt from the gross debt balance. The data corresponds to the data in the EDP notification tables 1 and 3A.

Table "Comparison of Central government net lending and on-budget entities' net financing requirement"

The table presents a comparison of the budget deficit and the central government net lending in national accounts for the four previous years. In Finland the budget deficit refers to the net financing requirement as recorded in the central government budget. The concept covers on-budget entities, and the budget deficit is calculated as the difference of all central government revenue and expenditure, before borrowing and amortisations.

National accounts data on deficit/surplus (i.e. net borrowing/lending) are obtained from net financing requirement via several correction items. In national accounts, net borrowing/lending may not be influenced by items representing financial transactions (changes in receivables and liabilities), such as lending, received loan repayments or other financial investments.

More incidental adjustment items are represented by the emission and exchange rate gains and losses which appear in the central government budget in so far as they are not included in national accounts interest items. Divergences from cash based calculations also arise because of taxes, subsidies and interests being recorded in some cases not on a cash basis (but on an accrual basis or a time adjusted basis), and because of other recording or timing differences.

Central government EMU surplus/deficit is obtained by summing items A and B of the table. National accounts data on central government surplus is obtained by adding the co-called swap-adjustment of the interest expenditure.

The table shows that significant differences when compared with the budget surplus are caused especially by the selling of shares and equities, which do not improve the EMU deficit in national accounts. By contrast, the central government surplus in national accounts is increased typically by surplus in the extra-budgetary funds.

The data corresponds to the data in the EDP notification table 2A.

Table "Comparison of local government net lending and the annual margin in the profit and loss account of local government"

The table presents a comparison of the municipalities' and joint municipal boards' annual margin and the national accounts local government net lending for the four previous years. The starting point for the comparison calculations of the national accounts and the concepts of its basic data is the annual margin in municipalities' and joint municipal boards' profit and loss account, which is conceptually clear and the most followed key figure in local government accounts. The annual margin indicates the difference of the revenue and expenditure from the local government's actual activities, i.e. how much of the annual revenue remains after all costs and expenditure from usual activities have been covered. In the long term, the annual margin should be sufficient to cover depreciations\investments.

As national accounts and local government accounts are independent systems operating with their own classifications and concepts, there are differences between the annual margin and the local government deficit (net lending) in national accounts. These differences can be outlined as follows:

1) Timing. In national accounts, income taxes are recorded on an accrual basis whereas local government accounts use the cash basis. Hence a timing adjustment must be made in the comparison calculations (adjustment 1).

2) Definition of sectors. Municipal financial statements use the so called "consolidated municipality" principle, which means that all municipal enterprises are included in the annual margin. The income and expenditure flows between a municipality and a municipal enterprise have been consolidated from the annual margin. By contrast, national accounts take the "sectoral view", in which a part of the enterprises are classified as enterprises (adjustment 3), and they therefore affect local government net lending only through the compensation paid to the municipality or joint municipal board for the basic capital (adjustment 2).

3) Coverage. In addition, the calculations must be adjusted for the effect on the net lending of the local government sector of items not included in the annual margin. The most significant of all adjustments to the annual margin are the investments included in these items. In addition, capital transfers and the annual margin of the Regional Government of Åland must be taken into account (adjustments 4, 5 and 6).

Other adjustments (adjustment 7) indicate statistical discrepancies that cannot be explained. They are mainly due to difficulties in distinguishing the effect of municipal enterprises from the annual margin sufficiently accurately.

The data corresponds to the data in the EDP notification table 2C.

Table "Comparison of the net lending of the sub-sector Social security funds and the deficit/surplus of funds"

The table presents a comparison of the net lending of the sub-sector Social security funds and the deficit/surplus of funds for the previous four years.

In addition to national accounts net lending, Finland publishes no deficit/surplus level for the sub-sector Social security funds (S.1314). In particular, no balance figure exists for the sub-sector Employment pension schemes (S.13141), which could systematically be compared with net lending in national accounts.

Therefore, the table presents as the starting figure the surplus/deficit of the sub-sector "Other social security funds", which is based on the financial statement data of the institutions belonging to this sub-sector. The effect of the Employment pension schemes sub-sector on the surplus/deficit is presented as a carry-over item (1) in the table. A carry-over item is the employment pension schemes' net lending in the latest published national accounts sector accounts; the key components of the net lending are also specified in the table.

Possible other differences are presented in adjustment item 2.

The data corresponds to the data in the EDP notification table 2D.

Table "Items influencing the change in EMU debt"

The table presents the items influencing the change in EMU debt for the previous four years. Many other factors besides deficits influence general government indebtedness and its changes. The table shows the contributions of the deficit as well as the other factors to the change in EMU debt.

This table illustrates how much general government invested in financial assets, what was the change in non-EMU debt (accruals and deferred income etc.) as well as how much exchange rates and other differences in recording influenced the change in EMU debt during the previous four years. These differences in recording stem from the time-adjustment of interests and the recording of profits or loss from debt emissions or premature amortisations.

Net lending in national accounts (A.) is recorded into the table with the opposite sign; the surplus of the past few years (positive net lending) has decreased the need for new debt. Change in the general government EMU debt during the previous year is obtained by summing items A-E of the table. The items with the positive sign increase the debt. As EMU debt shows general government debt to other sectors, all items have been consolidated, that is, general government internal claims and debts have been deducted.

EMU debt does not cover all the financial assets specified in ESA95. The influence of derivatives, trade credits and accruals and deferred income on the change in EMU debt is show in part C of the table. Other items influencing the change in the debt (E.) are, among others, capital losses due to debt conversion, differences in the cash- and accruals-based entries as well as a possible statistical discrepancy between the sector accounts and the financial accounts of the national accounts.

The data corresponds to the data in the EDP notification tables 3A.

---

Last updated 29.3.2007