4.18 Central government expenditures
See Table 4.18 hereAbout the data
Definitions
Data sources
Government expenditures include all nonrepayable payments, whether current or capital, requited or unrequited. Total expenditure of the central government as presented in the International Monetary Fund's Government Finance Statistics (GFS) is a more limited measure of general government consumption than that shown in the national accounts (see table 4.12) because it excludes consumption expenditures by state and local governments. At the same time, the GFS concept of central government expenditure is broader than the national accounts definition because it includes government gross domestic investment and transfer payments.
Data on the revenues and expenditures of governments are collected by the IMF through questionnaires distributed to member governments and from the Organization for Economic Cooperation and Development (OECD). Despite the IMF's efforts to systematize and standardize the collection of public finance data, statistics on public finance are often incomplete, untimely, and noncomparable.
Expenditures can be measured either by function (education, health, and defense) or by economic type (wages and salaries, interest payments, and purchases of goods and services). Functional data are often incomplete, and coverage varies from country to country because functional responsibilities stretch across levels of government for which no data are available. Therefore, only defense expenditures, which are usually the responsibility of the central government, are shown here. For more information on education expenditure see table 2.7; for more information on health expenditure see table 2.11.
The classification of expenditures by economic type can also be problematic. For example, the distinction between current and capital expenditure may be arbitrary, and subsidies to state-owned enterprises or banks may be disguised as capital financing. For further discussion of government finance statistics see the notes to tables 4.16 and 4.17.
• Total expenditure of the central government includes both current and capital (development) expenditures and excludes lending minus repayments.
• Goods and services include all government payments in exchange for goods and services, whether in the form of wages and salaries to employees or other purchases of goods and services.
• Wages and salaries consist of all payments in cash, but not in kind, to employees in return for services rendered, before deduction of withholding taxes and employees' contributions to social security and pension funds.
• Interest payments are payments for the use of borrowed money to domestic sectors and to nonresidents. (Repayment of principal is shown as a financing item, and commission charges are shown as purchases of services.) Interest payments do not include government payments as guarantor or surety of interest on the defaulted debts of others, which are classified as government lending.
• Subsidies and other current transfers include all unrequited, nonrepayable transfers on current account to private and public enterprises, and the cost of covering the cash operating deficits of departmental enterprise sales to the public.
• Capital expenditure is the expenditure to acquire fixed capital assets, land, intangible assets, government stocks, and nonmilitary, nonfinancial assets. Also included are capital grants.
• Defense expenditure comprises all expenditures, whether by defense or other departments, on the maintenance of military forces. Also in this category are such closely related items as military aid programs. Defense expenditure does not include that on public order and safety.
Data on central government expenditures are from the IMF's Government Finance Statistics Yearbook and IMF data files. The accounts of each country are reported using the system of common definitions and classifications found in the IMF's Manual on Government Finance Statistics (1986). For complete and authoritative explanations of concepts, definitions, and data sources see these IMF sources.