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12° Nicosia,
31 August, 2026
 

Cyprus records €770.6 million fiscal surplus in first seven months

Social Insurance Fund accounts for most of the surplus.

Newsroom

Cyprus recorded a General Government fiscal surplus of €770.6 million in the first seven months of 2026, equivalent to 2.0% of GDP, according to preliminary figures released by the Statistical Service on Monday.

The surplus was €11 million higher than the €759.6 million recorded in the same period last year, although its share of GDP fell from 2.1% to 2.0%.

The improvement came as government revenue grew faster in absolute terms than expenditure. Revenue increased by €354.1 million, or 4.1%, reaching €8.91 billion, while total spending rose by €343.1 million, or 4.4%, to €8.14 billion.

Tax receipts drive revenue growth

Taxation provided a major contribution to the increase in state revenue.

Receipts from income and wealth taxes rose by €157.5 million, or 7.7%, to €2.19 billion. Social contributions also increased significantly, rising by €207.2 million, or 7.5%, to €2.98 billion.

Taxes on production and imports brought in €2.90 billion, an increase of €217.7 million, or 8.1%, compared with the first seven months of 2025.

VAT revenue was particularly strong. Net VAT receipts climbed by €259.5 million, or 14.7%, to €2.03 billion, from €1.77 billion a year earlier.

Not all revenue categories recorded gains. Capital transfers fell by €93.1 million to €19.6 million, while income from services declined by €45.1 million to €572.4 million. Interest and dividend receipts dropped by €33.3 million to €79.9 million, and current transfers fell by €56.8 million to €172.8 million.

Spending reaches €8.14 billion

Government expenditure increased by 4.4% during the January-July period.

Current spending accounted for most of the increase, rising by €384.3 million, or 5.4%, to €7.44 billion.

Social benefits rose by €165.2 million to €3.36 billion, while employee compensation increased by €74.8 million to €2.31 billion.

Spending on intermediate consumption recorded an 11.7% increase, reaching €873.3 million after rising by €91.5 million.

Interest payments increased by €15.8 million to €298.8 million, while current transfers rose by €45.8 million to €549.4 million.

Capital expenditure was one of the few major categories to fall, declining by €41.2 million, or 5.6%, to €698.8 million. Within this category, however, gross fixed capital formation increased by €10.7 million, or 2.1%, to €519.1 million.

Subsidies fell by €8.8 million, or 13.7%, to €55.6 million.

Social Insurance Fund posts largest surplus

The Social Insurance Fund accounted for most of the General Government surplus, recording a €775.1 million surplus in the first seven months of the year. This was up from €712 million in the same period of 2025.

Central Government, by contrast, recorded a €5 million deficit, compared with a €39.7 million surplus a year earlier.

Local Government recorded a marginal €0.5 million surplus, down from €7.9 million in January-July 2025.

The Statistical Service said estimates were used for several General Government entities within the Local Government subsector because the competent authorities had not provided sufficient data.

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