After five years with extensive annual growth in public spending, the figure dropped by almost 2% in 2021. Total public spending in 2021 amounted to DKK 11.7 billion, about a quarter of a billion less than in 2020.
Social protection tops the list
Government spending is divided into 10 main categories, or ‘functional groups’. The largest of these is ‘social protection’, accounting for DKK 4.2 billion of the total public expenditures in 2021, followed by ‘economic affairs’ (DKK 1.9 billion) and ‘health’ (DKK 1.8 billion).
The ’economic affairs’ category includes the ‘transport’ subcategory, which makes up about 70% of these expenditures.
Public spending on social protection in the Nordics
The Faroese government spends 36% of its total expenditures on social protection. In Denmark, this figure is 42%, in Norway 39% and in Iceland 27%.
‘Old age’ expenditures on a rapid increase
Public spending on the subcategory referred to in the statistics as ‘old age’ has increased significantly faster than other public expenditures. In the past six years, public spending on ‘old age’ rose by more than half, compared to a 40% overall increase in public spending in the same period.
Public spending in the ‘old age’ subcategory primarily goes towards pensions and elderly care. Public expenditures can be classified into industries and sectors. The graph above shows a major shift in 2015 when a large proportion of ‘old age’ expenditures was transferred as part of a sectoral shift for this subcategory from the ‘general government’ to the ‘local government’ sector.
Relatively high spending on transport
The ‘transport’ subcategory has high priority in the Faroes compared to other Nordic countries. Most of the public spending goes to the development and maintenance of the transport infrastructure, which includes roads, tunnels and subsea tunnels. This subcategory also includes local transport and helicopter services.
The Faroese government spends more than 11% on ‘transport’. Some years, this figure has come as high as 14%. For comparison, Denmark only spends 3% on ‘transport’ and Norway and Iceland spend about 6%.