The City Executive Council approved Reykjavík City's interim financial statement for January-September 2024 today. The forecast for 2024 projects a positive result of about 531 million króna. This outcome is expected to be achieved.
A and B operations showed a positive result of 1.6 billion króna, which was 4.5 billion króna better than the same period in 2023. A operations for the first nine months of 2024 showed a negative result of 1.1 billion króna, which was 300 million króna better than the same period in 2023. The operating result before financial items and depreciation (EBITDA) was positive by 9.3 billion króna, about 2.7 billion better than a year ago.
In recent years, Reykjavík City's operating environment has been characterized by labor market expansion, persistent inflation, and high interest rates. Recently, expectations for greater stability have increased, partly due to moderate collective wage agreements supported by municipalities with promises of lower fees and participation in free school meals.
Uncertainty in the coming months mainly relates to how well inflation and interest rates can be reduced without overcooling the economy. The Statistics Iceland's economic forecast from November 4 predicts 0.1% economic growth this year and 2.4% next year. Negotiations are still ongoing with public sector unions, including the Icelandic Teachers' Union, which has been on strike.
Financial relations between the state and City, as well as other municipalities, continue to be tested. The most significant issue is funding for disabled people's services. Important milestones have been reached in the past two years, with increased funding through tax revenue transfers from the state to municipalities. However, the long-term funding for disabled people's services remains unclear, especially regarding services for children with complex needs and disabled people requiring safety measures. Additionally, it's unclear how municipalities can address the foreseeable needs for further housing development and increasing personal assistance (NPA) agreements.
The Reykjavík City budget for 2025-2029, approved by the City Council on December 3, continues to demand strict operational discipline. A new procedure was introduced, emphasizing managers' and specialized councils' responsibility to prioritize services and projects within the available financial resources for the coming fiscal year. The budget is based on Reykjavík City's financial policy.