Central government expenses exceeded revenue, while local governments and social insurance funds were in the black by the end of June.

The entire public sector deficit grew by €204 million on year due to the government sector's relatively poorer fiscal position, said Helin Kütt, analyst at the Finance Ministry's fiscal policy unit.

The central government (mainly the state budget) sported a total deficit of €533 million in June, up €209 million on year due to bigger income tax refunds and rapidly growing expenses.

Social expenses and financial costs have grown the most in the first half-year.

The central government's deficit was reduced by €30 million in June when revenue grew faster than expenses.

The combined fiscal position of the Health Insurance Fund and the Unemployment Insurance Fund was €74 million in the black by late June. Solid tax receipt reinforced the former's position by €16 million to €68 million or €15 million more compared to a year ago. The Unemployment Insurance Fund had a surplus of €6 million by late June, which is €6 down on a year ago. This deterioration is caused by unemployment rising to 49,700 unemployed in June.

Local government budgets were €113 million in the black for a reduction of €4 million since June of 2022. While natural persons income tax receipt was up, so were local governments' expenses.

Agencies funded from the state budget increased their spending by €93 million or 7.4 percent to €1.342 billion. Social benefits, tax revenue passed on and financial expenses grew fastest.

The total expenses of agencies have grown by €1.144 billion or 17.1 percent over the first half-year. Over half of this growth, 64 percent, is from bigger social benefits and operational expenses.

Old-age pensions required an additional €29.7 million, large family benefit €9.1 million, child allowance €5.2 million and early pension €2.2 million in June.

Operational expenses grew by 13.8 percent on year in June, or by €11.6 million, mainly due to national defense investments. Ammunition purchases required €6.7 million more than last year, while weaponry and equipment expenses were up €3.2 million.

Labor costs were up €16.6 million in June year-over-year for a growth of 16.5 percent. The main component therein were wage hikes for teachers, internal security and cultural workers by 15 percent, as well as the public sector's general 5-percent salary advance.

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