Cyprus budget surplus falls as public servant pay bill climbs to €4.13bn

The Cyprus general government achieved a fiscal surplus of €939.2 million during the entirety of 2025, according to preliminary results released by the Cyprus Statistical Service (Cystat) on Tuesday.

This positive balance represents 2.6 per cent of the national gross domestic product (GDP), a decrease from the surplus of €1.44 billion, or 4.1 per cent of GDP, recorded during the previous year.

According to the report, total revenue for the twelve-month period increased by €864.80m to reach €15.62bn, marking a 5.9 per cent rise compared to the €14.75bn collected in 2024.

Income and wealth tax receipts grew by 9.0 per cent to total €4.15bn, while social contributions provided a significant boost of €358.70m to reach a total of €4.88bn.

Moreover, property income experienced a substantial relative increase of 30.4 per cent to amount to €160.30m, whereas taxes on production and imports remained relatively stable at €4.70bn.

Within the production tax category, net VAT revenue fell by 1.7 per cent, dropping from €3.17bn in 2024 to €3.12bn in the current reporting period.

Revenue generated from the sale of goods and services rose by 17.9 per cent to €1.05bn, and current transfers increased by 7.1 per cent to reach €421.10m.

Conversely, capital transfers suffered a decline of 22.0 per cent, falling to €262.90m from the €337.00m recorded the prior year.

On the spending side, total expenditure surged by 10.3 per cent to reach €14.68bn, compared to the €13.31bn spent in 2024.

The compensation of employees, encompassing civil servant pensions and social contributions, rose by 6.5 per cent to total €4.13bn.

Social benefits, the largest expenditure category, increased by 7.2 per cent to reach €5.69bn, up from €5.30bn in the corresponding period of 2024.

Intermediate consumption costs grew by 9.3 per cent to €1.60bn, while current transfers rose by 77.80m to reach €920.20m.

The capital account witnessed a massive 46.6 per cent expansion to reach €1.77bn, driven by a 25.1 per cent rise in gross capital formation which amounted to €1.21bn.

Other capital expenditure more than doubled during the period, reaching €559.90m compared to €240.40m in 2024.

In contrast to the broader spending trend, interest payable on government debt decreased by 6.1 per cent to €418.70m.

Subsidies also saw a reduction, falling by 11.4 per cent to a total of €151.80m by the end of December.

Finally, the statistical service explained that they had to use estimates for parts of the government, particularly local authorities, because the relevant offices failed to provide enough data.