Social protection remained the core function of government expenditure in 2021, representing a fourth of total general government expenditure, according to statistics published on Thursday by the National Statistics Office.

In a statement presenting data on the classification of functions of government, a commonly used methodology to examine the structure of government expenditure, the NSO said that government expenditure in 2021 increased by €527.3 million over 2020, amounting to €6,542.4 million.

Social protection remained the primary expenditure function amounting to €1,655.5 million, an increase of €85.7 million over 2020, with the main increase reported in social benefits (€37.9 million). 

A total of €1,375.1 million was spent on economic affairs, an increase of €39.3 million over 2020.

A significant amount was spent on measures to mitigate the adverse effects of the COVID-19 pandemic, particularly the COVID-19 business assistance programme of €355.2 million and a further €42.9 million spent on the economic regeneration voucher scheme.

A share of government spending was also allocated to energy support initiatives to lessen the effects of the energy crisis (€77.4 million). 

Total outlay on health stood at €970.7 million, a rise of €28.5 million, mainly as a result of a larger outlay on the compensation of employees (€48.8 million). This was followed by expenditure on general public services and education, which amounted to €913.3 million and €837.1 million, respectively.

Increase in almost all functions of government

Almost all functions of general government expenditure registered an increase, except for housing and community amenities, which stood at €77.7 million. 

In 2021, the highest share of general government expenditure was spent on social protection, which accounted for 25.3% of the total outlay.

Government expenditure by function. NSO infographic

This was followed by economic affairs (21%), health (14.8%), general public services (14%) and education (12.8%). 

Expenditure on housing and community amenities had the lowest share of total expenditure, followed by defence, standing at 1.2% and 1.5%, respectively. 

Spending on general public services as a share of total general government expenditure registered an increase of 1.9 percentage points over 2020, representing the highest increase.

Decreases in the share of expenditure were noted for economic affairs and health, down by 1.2 and 0.8 percentage points, respectively. 

Expenditure as a percentage of GDP

General government expenditure as a percentage of GDP decreased by two percentage points, from 45.7% in 2020 to 43.7% in 2021. 

A considerable share of government outlay was in the form of compensation of employees (27%), social benefits in cash or in kind (21.2%), intermediate consumption (19.7%) and subsidies (10.6%). 

The largest share of government expenditure was spent on old age (€1,039.8 million), which represents 62.8% of spending on social protection and 15.9% per cent of total general government expenditure.

This was followed by expenditure on general economic, commercial and labour affairs, which amounted to €614.8 million, or 44.7% of expenditure on economic affairs.

A considerable share of general government outlay was spent on executive and legislative organs, financial, fiscal and external affairs (€576.1 million), followed by a total of €550.6 million and €335.4 million on hospital services and transport, respectively.