Faroese budget forecast shows 59 million krona deficit for 2027

The Faroese Ministry of Finance has projected a 59 million krona deficit in the national budget for 2027, according to preliminary estimates released by the ministry.

The forecast, based solely on existing operations and without political adjustments, indicates that running public services next year will cost 331 million krona more than in 2026, rising from 7.152 billion to 7.483 billion krona.

Total expenditures are expected to reach 8.083 billion krona, with revenues projected at 8.024 billion krona. The deficit stems from increased costs, including a 2.94% rise in public benefits, pensions, and study grants, as well as wage hikes tied to private sector labor agreements valid until May 2028.

Tax revenues are forecast to grow, with land tax up by 180 million krona, VAT by 125 million, social security contributions by 90 million, and capital gains tax adding another 90 million krona. The ministry notes that political revisions to the budget—such as savings or new allocations—will likely alter the figures before the final 2027 budget is submitted to the Løgting (Faroese Parliament).

The preliminary estimates were prepared by ministry officials and contain no political decisions. A ministry statement dated June 16 confirms that adjustments are expected before the budget proposal is formalized.