Treasury finances in September 2002. Report date: October 24, 2002


Treasury Finances in September
Report date October, 2002

Figures for Treasury finances for the first nine months of 2002 are now available. They are on a cash basis and therefore not comparable to the Treasury accounts or the fiscal budget, both of which are presented on an accruals basis.

The cash deficit from operations amounted to 19.6 billion krónur, compared to a deficit of 6.9 billion krónur at the end of September 2001. This was mostly foreseen in the budget projection, which estimated the cash deficit at 17 billion krónur, the difference being solely accounted for by lower income from sale of assets than estimated. Financial transactions were in surplus by 6.7 billion krónur whereas September 2001 reported a deficit of 1.8 billion krónur. The main difference comes through sale of assets in Landsbanki of 5 billion krónur. Further, incoming repayments of outstanding claims increased by 3 billion krónur compared to September last year.

Total revenue amounted to 168 billion krónur, an increase of about 9.8 billion krónur from last year or 6 per cent. Tax revenue increased less, or by 4 per cent in nominal terms. The difference stems entirely from increased revenue through sale of assets. With price increases amounting to 6 per cent during this period this represents a 2 per cent fall in real terms. Taxes on income and profits increased by 3 per cent on last year. Social security taxes rose by 9S per cent reflecting i.a. a 7S per cent increase in wages. Taxes on goods and services rose by 4 per cent in nominal terms, indicating a 2 per cent decline in real terms. Receipts from VAT, however, increased by more than 6 per cent showing, for the first time since early 2001, an increase in real terms.

Total expenditures amounted to 184.3 billion krónur, increasing by close to 10 billion krónur from last year or 11.6 per cent. Expenditures exceeded the budget estimates by 4.7 billions, or 2.6 per cent. Social expenditures amount to 113 billion krónur, accounting for about 60 per cent of total Treasury expenditure. The most significant part is health care with 46 billion krónur increasing by 6 billion from last year. Social security expenditures amount to 36 billion krónur, an increase of 4 billion from last year. Interest payments increase by 1 billion krónur, or 7 per cent from September 2001.

Treasury borrowing amounted to 50 billion krónur for the first nine months of the year. Thereof foreign long-term borrowing, taken to refinance foreign loans and to increase the weight of long-term loans as proportion of capitalisation of foreign short-term loans, amounted to 34 billion krónur. Domestic borrowing amounted to 15 billion krónur. Against this weigh debt repayments of 23 billion krónur. The Treasury remitted 6.8 billion krónur to the Government Employees Pension Fund in order to lower future liabilities of the Treasury. The overall cash balance was positive by 7.9 billion krónur, compared with a 4.9 billion krónur deficit in 2001.