The results of Government Accounts for 2015 have now been published and the accounts forwarded to the Icelandic parliament Althingi. The current balance for the year was positive by ISK 20.0 billion, which accords with budget forecasts. By comparison, in 2014 the current balance was positive by ISK 46.4 billion.
Revenues in 2015 somewhat exceeded budget estimates. This is due to dividends paid by financial undertakings and higher tax bases resulting from increased economic activity, which were taken into consideration in the supplementary budget. Expenditures exceeded budget allocations somewhat, as increased allocations were approved with the year's supplementary budget to meet, among other things, higher wage expenditures following bargaining agreements with public employees and wage arbitration decisions, the Treasury's taxes on financial income and other aspects.
The primary balance for the year was positive by the equivalent of 3.8% of GDP, compared to a positive primary balance of 5.3% in 2014.
In 2015 the Treasury had a net funding surplus equivalent to 1.9% of GDP, compared to a surplus of 3.9% the previous year, much in line with the expected result. The budget estimated a net funding surplus of around 1.1% of GDP, and the Supplementary Budget a funding surplus of around 1.9%.
Strong growth has supported an increase in purchasing power
“Stability in the economic environment, strong GDP growth and actions taken by the government in recent quarters have given strong support for increasing purchasing power among the general public and improved the Treasury's performance. Following the policy of fiscal responsibility, the objective was a positive overall Treasury balance in 2015, and this policy is reflected in the balance which has been achieved through effective actions,” says Minister of Finance and Economic Affairs Bjarni Benediktsson regarding the outcome of government accounts. The ongoing Treasury debt build-up was brought to an end in 2014, with the first budget bill since 2007 not anticipating a deficit outcome.
The Minister emphasised the importance of continuing to pay down debt, reducing the Treasury's debt service burden and creating scope to get to work on various urgent projects and obligations. “This will deliver major benefits for Icelandic society as time progresses. The task we face now is to insure continuing improvement in fiscal matters,” the Minister added. The five-year Statement of Fiscal Policy and Fiscal Strategy Plan for the public sector, presented to the Althingi this spring, is intended to reinforce economic equilibrium and stability for corporates and households, as well as the public sector. “In so doing we open up possibilities for improvements and better services for the general public, while at the same time providing stronger support for the economic upswing and improving standards of living for Icelanders.”
Electronically endorsed accounts
For the third year in a row, the Minister of Finance and Economic Affairs, the Director General of the Financial Management Authority and the Auditor General all endorsed the Government Accounts with electronic signatures, using digital certificates. Iceland is among the first countries to endorse its Government Accounts in this manner.
Government Accounts in their entirety, with the accompanying breakdown and notes, are accessible on the website of the Financial Management Agency fjs.is.