Cyprus government posts €594m surplus despite rising spending

Cyprus recorded a general government surplus of €594.3 million between January and February of this year, representing 1.5 per cent of the country’s GDP, according to the state statistical service (Cystat).

This marked a decline compared with a surplus of €663.4m, corresponding to 1.8 per cent of GDP recorded during the same period in 2025.

The figures reflect the fiscal performance of the general government, based on preliminary estimates compiled by the statistical service.

Total revenue for the period reached €2.71 billion, reflecting an increase of €23.4 million, a rise of 0.9 per cent, compared with €2.68 billion in the corresponding period of 2025.

Revenue from taxes on income and wealth rose by €32.7m, an increase of 4 per cent, to €842.6m, compared with €809.9m in 2025.

At the same time, social contributions increased by €17.6m, a rise of 2.2 per cent, reaching €835.1m from €817.5m a year earlier.

Current transfers also recorded a modest rise of €1.4m, an increase of 3.3 per cent, amounting to €43.3m compared with €41.9m in 2025.

However, taxes on production and imports declined by €12.8m, representing a 1.6 per cent drop, to €802.7m, down from €815.5m in the previous year.

Within this category, net VAT revenue increased by €21.7m, a rise of 3.9 per cent, reaching €580.7m compared with €559.0m in 2025.

Property income fell by €2.6m, a drop of 19.5 per cent, to €10.7m from €13.3m in the previous year.

Revenue from the sale of goods and services decreased by €12.2m, or 6.6 per cent, to €173.6m, compared with €185.8m in 2025.

Capital transfers also declined by €0.7m, or 17.5 per cent, to €3.3m from €4.0m in the same period last year.

On the expenditure side, total spending rose to €2.11bn, marking an increase of €92.5m, or 4.6 per cent, compared with €2.02bn in 2025.

Intermediate consumption increased slightly by €1.6m, or 0.8 per cent, to €192.5m from €190.9m.

Compensation of employees, including imputed social contributions and pensions of civil servants, rose by €7.5m, or 1.2 per cent, reaching €644.2m compared with €636.7m in 2025.

Social benefits recorded a significant increase of €45.5m, or 5.3 per cent, totalling €898.5m compared with €853.0m in the previous year.

Current transfers saw a sharp rise of €52.1m, or 38.5 per cent, reaching €187.4m from €135.3m in 2025.

The capital account decreased by €11.0m, or 8.4 per cent, to €119.5m compared with €130.5m a year earlier.

Within this category, gross capital formation declined by €13.3m, or 13.5 per cent, to €85.5m from €98.8m in 2025.

Other capital expenditure, however, increased by €2.3m, or 7.3 per cent, reaching €34.0m compared with €31.7m in the previous year.

Interest payable remained broadly stable, decreasing marginally by €0.1m, or 0.1 per cent, to €68.1m from €68.2m in 2025.

Subsidies fell by €3.1m to €6.8m, compared with €9.9m in the same period last year.

Finally, the statistical service highlighted that some figures, particularly within local government, are based on estimates due to incomplete data submission, which may affect final results.