The Covid-19 pandemic and the ensuing economic crisis have had a strong impact on central government finances for the second year running. The National Audit Office of Finland (NAOF) continues to monitor the economic development and central government decision-making closely during the pandemic. The NAOF collects data in order to meet Parliament's rapid information needs and to support future auditing.
The following visuals, produced by the NAOF, illustrate the economic measures taken in 2021 and 2020 and their magnitude.
Update on 15 December 2021
A decision on the fourth supplementary budget for 2021 was made in December. The main change was the updated tax revenue estimates, which had improved significantly. The estimated borrowing need decreases by more than EUR 2 billion. As regards central government expenditure, the years 2020 and 2021 currently look very similar: in the final accounts for 2020, total expenditure was EUR 68 billion, which is almost exactly identical to the amount of total expenditure budgeted for 2021. However, the realized expenditure may be slightly lower than that. The most significant difference is that the borrowing need decreases by almost EUR 5 billion in 2021 from the previous year. However, EUR 14 billion is an exceptionally high amount of debt. The changes in appropriations and in the overall situation can be examined in greater detail below.
The five different visuals above illustrate how the budget has changed during 2021. You can move between the visuals using the arrows. The first visual illustrates the budget changes as regards expenditure, revenue, and borrowings. On page 2, you can view the impacts of the supplementary budgets on the expenditure of the administrative branches. On page 3, you can examine the changes per administrative branch in detail. The visual on page 4 shows the impact of the supplementary budgets on central government revenue. Page 5 illustrates the impact of the budget changes on central government borrowing. Source: budjetti.vm.fi
The visual below provides an overall picture of the central government indebtedness caused by the crisis and of the reductions in revenue estimates in 2020.
Supplementary budget I (Government proposal 20 March 2020): 1.08 billion euros
Supplementary budget II (Government proposal 9 April 2020): 3.63 billion euros
Supplementary budget III (Government proposal 8 May 2020): 0.88 billion euros
Supplementary budget IV (Government proposal 5 June 2020): 4.05 billion euros
Supplementary budget V (Government proposal 3 Sept. 2020): -0,24 billion euros
Supplementary budget VI (Government proposal 24 Sept. 2020): 0.2 billion euros
Supplementary budget VII (Government proposal 29 Oct. 2020): 1,49 billion euros
By studying the visualisation, you get an overview of how the Budget has changed during the crisis. Each of the supplementary budgets is shown in a different colour on the expenditure estimates and revenue estimates tabs. Use the dropdown menu on the right of the expenditure estimates tab to view budget changes in individual administrative branches. Place the pointer on the toolbar sections to read more about the way in which the appropriation is allocated.
The visualisation provides information on the economic impacts of decisions taken during the three stages of the crisis management. Especially in the first stage of the crisis, funding was channelled into preparedness and purchases. In the second stage, the focus shifted to supporting citizens, companies and municipalities. The NAOF has already started examining the support measures, using both fiscal policy monitoring and audits.
In the third stage, the Government has started to stimulate the economy. In the examination of the stimulus measures, the focus is, in addition to fiscal policy, also on performance issues: how the stimulus can be targeted so that sustainable economic growth can be ensured.
In the long term, the task of fiscal policy monitoring is to promote balanced and sustainable general government finances, which also provides a basis for economic growth. The focus in fiscal policy monitoring and audit is also on growing central government liabilities (agreed within the framework of business support and EU-level arrangements), which are not shown in the Budget.
You can examine the Budgets and supplementary budgets in the budget compilation produced by the Ministry of Finance (in Finnish) and view the budget proposals submitted to Parliament, reports produced by parliamentary committees, and parliamentary decisions at the website of the Finnish Parliament (in Finnish).