DEVELOPMENT OF PUBLIC FINANCES

The cyclical fluctuations have a major impact on the public finances. A boom means that the expenditure on e.g. unemployment benefits decreases while the surplus of taxes increases. The opposite is the case when a recession takes effect. Figure 1 shows the trend in government surpluses and deficits as a percentage of the GDP.

Figure 1

Government Surpluses and Deficits in Per Cent of GDP

Source: Statistics Greenland