Government expenditure by function – COFOG
Data extracted in February 2021
Planned article update: February 2022
General government expenditure in the EU remained stable at 46.6 % of GDP between 2018 and 2019.
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.
In 2019, EU-27 general government expenditure stood at 46.6 % of GDP and remained unchanged as compared to 2018. Based on the latest available expenditure data by economic function for 2019, more than half was devoted to the functions ‘social protection’ (41.4 % of total expenditure) and ‘health’ (15.1 % of total expenditure), which accounted for 19.3 % and 7.0 % respectively of GDP. The other functions of government spending with a large share of government expenditure are ‘general public services’ (12.4 % of total expenditure or 5.8 % of GDP), ‘education’ (10 % of total expenditure or 4.7 % of GDP) and ‘economic affairs’ (9.5 % of total expenditure or 4.4 % of GDP). The functions ‘public order and safety’ (1.7% of GDP), ‘defence’ (1.2% of GDP), ‘recreation, culture and religion’ (1.2 % of GDP), ‘environmental protection’ (0.8 % of GDP) and ‘housing and community amenities’ (0.6% of GDP) had more limited weights at EU level in 2019.
EU-27 general government expenditure stood at 46.6 % of EU GDP in 2019 and remained unchanged as compared to 2018.
General government expenditure amounted to 46.6 % of EU GDP in 2019 and remained unchanged as compared to 2018, using the latest available aggregated data.
As a ratio to GDP in 2019, the highest levels of government expenditure were found in France (55.6 % of GDP) followed by Finland (53.2 % of GDP) and Belgium (52.1 % of GDP), while the lowest levels were found in Ireland (24.5 % of GDP), Lithuania (34.6 % of GDP), Romania (36.2 % of GDP), Bulgaria (36.3 % of GDP) and Malta (37.0 % of GDP). Switzerland (32.7 % of GDP) recorded the lowest level among the EFTA countries.
General government expenditure by function
In the EU Member States as well as EFTA countries reporting data, ‘social protection’ was the most important function of government expenditure. In 2019, government social protection expenditure in the EU-27 amounted to EUR 2 699 billion and was equivalent to 19.3 % of GDP (see Table 1), compared to 19.2 % of GDP in 2018. The share of social protection expenditure in total expenditure increased from 41.2 % of total expenditure in 2018 to 41.4 % of total expenditure in 2019. Over the period 1995 to 2019, the share of social protection expenditure in total expenditure at EU level increased from 36.6 % of total expenditure to 41.4 % of total expenditure.
The next most important functions in terms of government expenditure were ‘health’ and ‘general public services’, amounting to EUR 983 billion or 7.0 % of GDP and EUR 804 billion or 5.8 % of GDP respectively in the EU-27 in 2019. ‘Education’ (EUR 654 billion or 4.7 % of GDP) and ‘economic affairs’ (EUR 618 billion or 4.4 % of GDP) followed. The remaining functions – ‘defence’ (1.2 % of GDP), ‘public order and safety’ (1.7 % of GDP), ‘environmental protection’ (0.8 % of GDP), ‘housing and community amenities’ (0.6 % of GDP) and ‘recreation, culture and religion’ (1.2 % of GDP) - together represented 5.4 % of EU-27 GDP in 2019.
Evolution of general government total expenditure by function
Between 1995 and 2007, total general government expenditure decreased as a ratio to GDP from 53.2 % of GDP in 1995 to 45.6 % of GDP in 2007. This decrease was mainly reflected in the functions 'general public services' and 'social protection'. During the first three years of the economic and financial crisis (2007-2009), government expenditure as a percentage of GDP grew in the EU. It increased from 45.6 % of GDP in 2007 to 50.7 % in 2009, which was partially due to a lower GDP. Apart from an increase between the years 2011 and 2012 (from 49.1 % of GDP to 49.7 % of GDP), it has steadily decreased ever since, and remained stable at 46.6 % of GDP between 2018 and 2019. This gradual decrease was partly the result of the fiscal consolidation measures, renewed economic growth and counter-cyclical reactions of government expenditure. In recent years, one-off expenditure to support financial institutions has been decreasing.
Not all the functions of government expenditure evolved the same between 2007 and 2019. Some of the functions have a natural tendency to be counter-cyclical, even without a change in policy. For example, government expenditure on unemployment benefits (part of social protection) is more prone to have a natural counter-cyclical evolution than other functions, such as government expenditure on education. During an economic crisis, more people become unemployed, whereas the number of pupils and students is more affected by demographic changes.
Between 2007 and 2009, expenditure on unemployment in the EU increased from 1.5 % of GDP to 1.9 %, decreasing ever since to stand at 1.3 % of GDP in 2019. Social protection expenditure as a whole increased from 17.6 % of GDP (2007) to 19.8 % (2009). Between 2016 and 2019, social protection expenditure decreased from 19.7 % of GDP in 2016 to 19.3 % of GDP in 2019 - together with the drop in expenditure on general public services (6.3 % of GDP in 2016 decreasing to 5.8 % of GDP in 2019) it is the main driver of the decrease in total expenditure. Between 2007 and 2009, government expenditure on education in the EU rose from 4.7 to 5.1 % of GDP mainly due to a lower denominator (GDP). Expenditure on education in the EU gradually decreased from 5.1% of GDP in 2009 to 4.7 % of GDP in 2019.
In terms of the share of total expenditure, the share of 'social protection' expenditure was 38.4 % in 2008 thereafter increasing to 41.4 % of total expenditure in 2019. However, the rising share of 'social protection' expenditure in recent years is accompanied by decreasing shares of GDP in the period 2009-2019.
Relatively stable shares of total expenditure over 1995-2019 are noted for 'public order and safety', 'economic affairs' (although a peak is noted in 1995 due the assumption of debt relating to a former East-German holding company and in 2010 due to the high level of capital transfers to support financial institutions at the height of the financial crisis), 'environmental protection' and 'recreation, culture and religion'.
A steady increase over the period from 1995 to 2019 is noted for 'health', where the shares in total expenditure increased from 11.1 % of GDP in 1995 to 15.1 % of GDP in 2019. Expenditure on 'education' increased from 9.2 % of total expenditure in 1995 to 10.0 % of total expenditure in 2019.
Decreases in the share of total expenditure over 1995 to 2019 are noted for 'defence' (3.1 % of total expenditure in 1995 and 2.6 % of total expenditure in 2019) and 'housing and community amenities' (2.1 % of total expenditure in 1995 and 1.2 % of total expenditure in 2019).
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'
Composition of general government total expenditure by function
The COFOG classification allows for an analysis of general government total expenditure by its socio-economic purpose - in other words "why" government spent money. An analysis by ESA transaction allows for an analysis of how government spent money.
The most important component of government total expenditure are social benefits (in cash) and social transfers in kind ( - purchased market production). Social cash benefits are paid to households in order to relieve them of social risks or needs. Examples of social transfers are pension payments, unemployment benefits and child allowances. In 2019 in the EU-27, social benefits (in cash) and social transfers in kind ( - purchased market production) made up 46.1 % of government total expenditure or EUR 3 002 billion. The majority of social transfers in kind are classified in the function 'social protection', with relevant amounts also recorded in 'health' and to a lesser extent 'education'.
Compensation of employees made up nearly 22 % of government expenditure in the EU-27 in 2019 and amounted to EUR 1 415 billion. It consists of wages and salaries of government employees as well as employers' social contributions. The largest amounts of compensation of employees were assigned to 'education', followed by 'health' and ' general public services'.
Intermediate consumption made up nearly 12 % of government expenditure in the EU-27 in 2019 and amounted to EUR 774 billion. It consists of government purchases of goods and services, excepts where these are regarded as capital formation. Important amounts were assigned to the functions 'health', 'general public services' and 'public order and safety'.
As regards other current transfers, payable, these made of nearly 5 % of total expenditure in the EU-27 in 2019. Two important kinds of other current transfers - current international cooperation as well as the VAT and GNI based own resource contributions to the EU budget are recorded within the function 'general public services'.
Subsidies and capital transfers (including investment grants) were concentrated in the function 'economic affairs', while property income, payable (consisting mainly of interest payments) was concentrated in the function 'general public services' (and the group 'public debt transactions' in particular).
Capital investments made up 6.5 % of general government total expenditure in the EU-27 in 2019. They were concentrated in the division 'economic affairs', which includes notably the group 'transport'.
Source data for tables and graphs
The detailed tables are available here.
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 (ESA 2010) 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 ESA 2010 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 year used in this publication is 2019 as the latest year available at EU-27 level.
Data was extracted on 23 February 2021.
Data for Spain (2019 only), France (2018-2019), Portugal (2019 only) and Slovakia (COFOG level II only) are labelled provisional.
Definition of general government and its subsectors
The data relate to the general government sector of the economy, as defined in ESA 2010, 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 ESA 2010. 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. 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 ESA 2010, paragraph 8.100 by using as reference a list of ESA 2010 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 2010;
- 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.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 ESA 2010 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-GFS@ec.europa.eu
In the framework of the European System of National Accounts (ESA 2010), 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 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)
- 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 - Classifications of the Functions of Government - 2019 edition