Central government finances are in deficit due to long-term slow economic growth, Russia’s war of aggression, the energy crisis and increased interest expenditure. The deficit has been covered by increasing debt. Off-balance-sheet liabilities have also increased.
The State Treasury has submitted its proposal for the 2022 State balance sheet to the Ministry of Finance. The final accounts cover on-budget entities.
The proposed final accounts include:
- statement on state returns and expenses
- balance sheet
- budget realisation statement
- cash flow statement
- appendices to the statements.
The final central government accounts are attached to the government’s annual report, which is submitted to Parliament in May.
According to the state budget realisation statement, the deficit for the financial year 2022 was EUR 4.690 billion. Budget income totalled EUR 71.571 billion, which included EUR 11.314 billion in net borrowing Budget expenses were EUR 76.261 billion.
Taxes provided a larger profit than previously
According to the central government’s income and expense account, the deficit for last year was EUR 4.8 billion, while the deficit for 2021 was EUR 6.3 billion. Revenue increased by 8.3% and expenses by 4.8% from 2021. The increase in income was mainly due to an increase in tax revenue.
In terms of euros, the largest increases were seen in the corporation tax (EUR 1.9 billion), the income and capital income tax (approx. EUR 1.4 billion), and value added tax (approx. EUR 1.2 billion) increased the most.
The share of payment transfer expenses in expenses was 79 per cent, totalling EUR 50.1 billion, which was approximately EUR 1.8 billion more than in 2021. Payment transfers include revenues and expenses, which do not involve a direct consideration.
The largest payment items in transfer expenses were expenses to local government (approximately EUR 15.4 billion), and to social security funds (approximately EUR 14.3 billion). The costs of the payment transfer for local government increased by approximately EUR 1.0 billion, most of which is due to the increase in central government transfers to local government. The payment transfer expenses for social security funds (a decrease of approx. EUR 0.2 billion) was subject to changes in several instalments, the largest of which were those arising from unemployment benefits. The subsidies paid to companies decreased by approximately EUR 0.7 billion from 2021.
The state paid half of this year’s January instalment for the funding of the wellbeing services counties or EUR 1.86 billion, to the wellbeing services counties in December 2022. The amount was recorded by the state as an expense for 2022.
Central government balance sheet increased 11 per cent
The state balance sheet totalled EUR 68.4 billion, which was approximately 11% higher than in 2021. The biggest changes in the balance sheet were changes in central government debt and other euro-denominated investments.
Central government debt in accordance with the balance sheet increased by EUR 11.5 billion to EUR 142.7 billion. Central government debt in accordance with the balance sheet refers to long-term borrowed capital and short-term borrowed capital instalments be paid in the following financial year and short-term euro-denominated debts.
Other euro-denominated investments increased by EUR 5.9 billion. A larger number of investments were necessary due to an increase in the amount of short-term collateral required as a result of the declining financial markets.
Jaana Tiimonen, Accounting Manager, State Treasury, tel. +358 (0)2955 02261, keskuskirjanpito(at)valtiokonttori.fi