General government surplus is estimated at NOK 36 billion in the first quarter of 2020. This is a reduction of more than 50 per cent compared to the same period in 2019. The decline can be attributed to reduced revenue from the petroleum sector.
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Updated figures from General government revenue and expenditure show a 3 per cent decline in total revenue in Q1 of 2020 compared to the corresponding period in 2019, largely owing to a significant reduction in projected revenue from the petroleum sector through taxes and dividends. Declining petroleum revenue was partly offset by significant growth in property income, for instance return on the financial assets of the Government Pension Fund Global. Furthermore, as a result of tax reductions and slower economic activity in the wake of the coronavirus pandemic, revenue from taxes and excises from Mainland Norway grew at a slower rate than in preceding quarters.
General government expenditure grew by 5 per cent in Q1 of 2020 compared to 2019. Compensation of employees, use of goods and services and gross acquisitions of fixed assets all increased by modest rates of between 4 and 5 per cent. At the same time social benefits to households spiked by 10 per cent. The central government has, through temporary changes to the benefits programs, assumed greater responsibility for income support to those affected by lay-offs and sickness in connection with the global pandemic.
Social protection still dominates
The quarterly figures are released along with revised annual 2019 figures, including a comprehensive classification of the functions of government expenditure. In 2019, social protection, the technical category encompassing pensions and social benefits, is still by far the largest expenditure function of general government, totaling close to 40 per cent of total government expenditure, followed by health and economic affairs.
Figure 1. Government expenditure by function in per cent of total expenditure
|Environmental protection and housing||3.5||3.2|
|Recreation, culture, and religion||3.5||3.6|
|Defence and public order and safety||6.2||5.8|
|General public services||7.6||8.0|
|Pensions and social protection||39.4||40.2|
Pandemic expected to influence future figures
Government finance statistics are generated, to the extent practically feasible, applying the accrual principle. Since economic shutdown, confinement, and subsequent government measures stemming from the pandemic began to yield economic effects only toward the close of the first quarter, the impact is expected to be greater on Q2 figures than on Q1 figures. Significant changes to benefit programs, relief on dues and taxes, and newly devised compensation and guarantee schemes are examples of government measures anticipated to affect future figures considerably.
Eivind Andreas Sirnæs Egge
Statistics Norway's Information Centre