Iceland - Public finance

Since 1984, Iceland's budget has shown a deficit averaging nearly 2% of GDP raising its net indebtedness relative to GDP to almost 30% in 1994. Government attempts to balance the budget were frustrated by the economic downturn during 1987–93 and by fiscal concessions to expedite wage settlements. Consequently, the deficit has been larger than expected reaching 34% of GDP in 1999.

The US Central Intelligence Agency (CIA) estimates that in 1999 Iceland's central government took in revenues of about $3.5 billion and had expenditures of $3.3 billion including capital expenditures of $467 million. Overall, the government registered a surplus of approximately $200 million. External debt totaled $2.6 billion.

The following table shows an itemized breakdown of government revenues and expenditures. The percentages were calculated from data reported by the International Monetary Fund. The dollar amounts (millions) are based on the CIA estimates provided above.


Tax revenue 86.2% 3,018
Non-tax revenue 12.7% 445
Capital revenue 1.1% 37
EXPENDITURES 100.0% 3,300
General public services 6.0% 198
Public order and safety 5.1% 167
Education 10.1% 332
Health 25.3% 835
Social security 21.8% 719
Housing and community amenities 1.0% 31
Recreation, cultural, and religious affairs 4.1% 135
Economic affairs and services 17.4% 575
Other expenditures 2.0% 67
Interest payments 7.3% 240

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