Government expenditure by function – COFOG
- Data extracted in March 2016. Most recent data: Further Eurostat information, Main tables and Database. Planned article update: March 2017.
This article analyses global trends in the structure of general government expenditure breakdown by their main socio-economic function (according to the Classification of the Functions of Government - COFOG).
Eurostat collects data on general government expenditure by economic function according to the international Classification of the Functions of Government (COFOG) in the framework of the European System of National Accounts (ESA2010).
This article is part of an online publication Government expenditure by function.
- 1 Main statistical findings
- 2 Data sources and availability
- 3 Context
- 4 See also
- 5 Further Eurostat information
Main statistical findings
In 2014, EU-28 general government expenditure amounted to 48.2 % of GDP, while in 2013 it amounted to 48.6% of GDP. Based on the latest available expenditure data by economic function for 2014, more than half was devoted to the functions ‘social protection’ and ‘health’, which accounted for 19.5 % and 7.2 % respectively of GDP. The other functions of government spending with a large share of government expenditure are ‘general public services’ (6.7 % of GDP), ‘education’ (4.9 % of GDP) and ‘economic affairs’ (4.2 % of GDP).
EU-28 general government expenditure at 48.2 % of EU GDP in 2014 and at 48.6 % of GDP in 2013
General government expenditure amounted to 48.2 % of EU GDP in 2014 and at 48.6 % of GDP in 2013.
As a ratio to GDP in 2014, the highest levels of government expenditure were found in Finland (58.2 % of GDP), France (57.5 % of GDP), Denmark (56.0 % of GDP), and Belgium (55.1 % of GDP), while the lowest levels were found in Lithuania (34.8 % of GDP). Romania (34.9 % of GDP) and Latvia (37.3 % of GDP). Switzerland (33.7 % of GDP) recorded the lowest level among all reporting EU and EFTA countries.
General government expenditure by function
In the EU as a whole, as well as in nearly all EU and EFTA countries reporting data, ‘social protection’ was the most important function of government expenditure. In 2014, government social protection expenditure in the EU-28 was equivalent to 19.5 % of GDP (see Table 1), unchanged compared to the previous year.
The next most important functions in terms of government expenditure were ‘health’ and ‘general public services’, amounting to 7.2 % and 6.7 % respectively of GDP in the EU-28 in 2014. ‘Education’ (4.9 % of GDP) and ‘economic affairs’ (4.2 % of GDP) followed. The remaining functions – ‘defence’ (1.3 % of GDP), ‘public order and safety’ (1.8 % of GDP), ‘environmental protection’ (0.8 % of GDP), ‘housing and community amenities’ (0.7 % of GDP) and ‘recreation, culture and religion’ (1.0 % of GDP) - together represented 5.6 % of EU-28 GDP in 2014.
Evolution of general government total expenditure by function
In terms of the share of total expenditure, the share of 'social protection' expenditure reached a low point in 2008 (27.8 % of total expenditure), before rising steeply at the height of the economic and financial crisis (38.7 % of total expenditure in 2009 and increasing steadily to 40.4 % of total expenditure in 2014). However, the rising share of 'social protection' expenditure in recent years is accompanied by decreasing shares of GDP in the last two years.
Decreases in the share of total expenditure over 2006-2014 are noted for 'education', 'housing and community amenities', 'defence', 'economic affairs' (despite the still considerable level of capital transfers to support financial institutions), 'recreation, culture and religion' and 'public order and safety'. A steady increase is noted for 'health'.
The figures at EU level mask disparate situations in the Member States.
All these different functions are developed in 10 statistical articles as follows:
- Expenditure on 'general public services'
- Expenditure on 'defence'
- Expenditure on 'public order and safety'
- Expenditure on 'economic affairs'
- Expenditure on 'environmental protection'
- Expenditure on 'housing and community amenities'
- Expenditure on 'health'
- Expenditure on 'recreation, culture and religion'
- Expenditure on 'education'
- Expenditure on 'social protection'
Data sources and availability
Reporting of data to Eurostat
Annual government finance statistics (GFS) data are collected by Eurostat on the basis of the European System of Accounts (ESA2010) transmission programme. Member States are requested to transmit, among other tables, table 1100, 'Expenditure of general government by function' twelve months after the end of the reference period. Table 1100 provides information about expenditure of the general government sector divided into main COFOG functions and ESA2010 categories. The transmission of the COFOG I level breakdown (divisions) is compulsory for the years 1995 onwards, whereas information on the COFOG II level (COFOG groups) is provided on a compulsory basis for the reference years 2001 onwards. The main reference years used in this publication are 2014 as the latest year available and 2006 as the first year for which complete data on expenditure by function are available at EU-28 level.
Data was extracted on 9 March 2016.
Data for Spain (ES, 2014 only), Slovakia (COFOG level II) and Croatia is provisional. COFOG level II data for Switzerland are reported but not published at request of the country.
Definition of general government and its subsectors
The data relate to the general government sector of the economy, as defined in ESA2010, paragraph 2.111: 'The general government sector (S.13) consists of institutional units which are non-market producers whose output is intended for individual and collective consumption, and are financed by compulsory payments made by units belonging to other sectors, and institutional units principally engaged in the redistribution of national income and wealth’.
Classification of functional expenditure of government
The Classification of the Functions of Government (COFOG) classifies government expenditure into ten main categories (divisions known as the 'COFOG I level' breakdown): general public services; defence; public order and safety; economic affairs; environmental protection; housing and community affairs; health; recreation, culture and religion; education; social protection. These divisions are further broken down into 'groups' (COFOG II level). Further information is available in the Eurostat Manual on sources and methods for the compilation of COFOG Statistics.
COFOG level II data
The provision of COFOG level II data has become compulsory with the introduction of ESA2010. The development of COFOG level II data is not completed in many Member States and data needs to be looked at with this in consideration.
Administrative expenditure data is additionally collected in so-called satellite accounts. In general, the amount of expenditure recorded in satellite accounts is expected to exceed the expenditure recorded under the respective COFOG division. For social protection, the relevant satellite account is ESSPROS. More details on the comparability of COFOG data with satellite accounts data can be found in the COFOG manual.
Definition of general government total expenditure
Government total expenditure is defined in ESA2010, paragraph 8.100 by using as reference a list of ESA2010 categories.
Government total expenditure comprises the following categories:
- P.2, 'intermediate consumption': the purchase of goods and services by government;
- P.5, 'gross capital formation' consists of: (a) gross fixed capital formation (P.51g); (b) changes in inventories (P.52); (c) acquisitions less disposals of valuables (P.53); where
- P.51g, 'gross fixed capital formation': consists of acquisitions, less disposals, of fixed assets during a given period plus certain additions to the value of non-produced assets realised by the productive activity of producer or institutional units. Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly, or continuously, in processes of production for more than one year;
- D.1, 'compensation of employees': the wages of government employees plus non-wage costs such as social contributions;
- D.29, 'other taxes on production, payable',
- D.3, 'subsidies, payable',
- D.4, 'property income, payable', consists of : (a) 'interest, payable' (D.41) and (b) 'other property income, payable' (D.42+D.43+D.44+D.45), where
- D.41, 'interest': excludes settlements under swaps and forward rate arrangements, as these are treated as financial transactions in the ESA 95;
- D.5, 'current taxes on income, wealth, etc, payable';
- D.62, social payments: cover social benefits and pensions paid in cash;
- D.632, 'social transfers in kind - purchased market production';
- D.7, 'other current transfers, payable';
- D.8, 'adjustments for the change in pension entitlements'
- D.9, 'capital transfers payable'
- NP, 'acquisitions less disposals of non-financial non-produced assets': public investment spending. Non-financial non-produced assets consist of land and other tangible non-produced assets that may be used in the production of goods and services, and intangible non-produced assets.
- Capital investments includes P.5 and NP.
- Other current expenditure includes D.7, D.29, D.5 and D.8.
Gross Domestic Product
Throughout this publication, nominal GDP, i.e. GDP at current prices is used.
Time of recording & symbol
In the ESA2010 system, recording is in principle on an accrual basis, that is, when ‘economic value is created, transformed or extinguished, or when claims and obligations arise, are transformed or are cancelled.'
":" not available
"pp" percentage points
More data and information
For more country-specific notes, e.g. on missing data, please refer to the metadata published on Eurobase. The authors can be contacted at ESTAT-ESA95-GOV@ec.europa.eu
In the framework of the European System of National Accounts (ESA2010), Eurostat collects data on general government expenditure by economic function according to the international Classification of the Functions of Government (COFOG) – see methodological note.
- Government expenditure by function - online publication
- Government finance statistics
- Government finance statistics - quarterly data
- Integrated government finance statistics presentation
- Structure of government debt
- Tax revenue statistics
Further Eurostat information
- Government statistics (t_gov)
- Annual government finance statistics (t_gov_10a)
- Government statistics (gov)
- Government finance statistics (EDP and ESA2010) (gov_gfs10)
- Annual government finance statistics (gov_10a)
- Government revenue, expenditure and main aggregates (gov_10a_main)
- General government expenditure by function (COFOG) (gov_10a_exp)
- Main national accounts tax aggregates (gov_10a_tax_ag)
- Annual government finance statistics (gov_10a)
- Government finance statistics (EDP and ESA2010) (gov_gfs10)
Methodology / Metadata
- Government revenue, expenditure and main aggregates (ESMS metadata file — gov_10a_main_esms)
- General government expenditure by function (COFOG) (ESMS metadata file — gov_10a_exp_esms)
- Manual on sources and methods for the compilation of COFOG statistics - Classification of the Functions of Government (COFOG) - 2011 edition