Cyprus fiscal surplus at 4.3% of GDP

Cyprus general government surplus was at 4.3% of GDP in the first eight months of 2019, mainly due to the increase in social contributions and revenue from taxes, according to the preliminary General Government fiscal results for the period of January-August 2019 released Friday by the Statistical Service of Cyprus.

The surplus rose to €924.2mn (4.3% of GDP), as compared to a surplus of €732.6mn for the corresponding period of 2018 (3.5% of GDP).

EXPENDITURE

Total expenditure for the first eight months of 2019 recorded an increase of €436.7mn(+9.7%) as compared to the same period of 2018 and reached €4,949.8mn (€4,513.1 mn in 2018).

Social benefits recorded the biggest increase (€190.3mn or 11.0%) and reached €1,917.1mn in January-August 2019 as compared to €1,726.8mn in January-August 2018.

The compensation of employees (including imputed social contributions and pensions of civil servants) also recorded a considerable increase (€149.2mn or 10.1%) and reached €1,630.7mn (as compared to €1,481.5mn in January-August 2018).

Intermediate consumption increased by €90.0mn (+20.9%) and reached €521.5mn for the first eight months of 2019 as compared to €431.5mn in the corresponding period of last year. Current transfers recorded an increased expenditure (by €64.7mn or 22.2%) and reached €356.5mn (as compared to €291,8mn in 2018).

Payable interest increased by €31.2mn(+9.6%) during the period of January-August 2019 to reach €355.3mn as compared to €324.1mn during the same period of 2018.

A smaller increase was recorded by capital transfers and subsidies, which increased by €6.1mn(+19.9%) and €1.6mn(+5.9%) respectively to reach €36.7mn and €28.5mn (as opposed to €30.6mnand €26.9mn correspondingly in January-August 2018).

A decrease was recorded for investment, which was reduced by €96.4mn(-48.2%) and was confined to €103.5mn as opposed to €199.9mn that were recorded during the period of January-August 2018. Excluding land annexations, that are included in investment, a decrease of €94.2mn is observed (€79.0mn in 2019 as compared to €173.2mn in 2018, that is a decrease of 54.4%).

REVENUE

Total revenue increased by 12%, that is €628.3mn, to reach €5,874.0 mn during the period of January-August 2019 (€5,245.7 mn in the corresponding period of 2018).

Social contributions collected by the State during this period increased significantly (by €360.1mn, that is +29.7%) to total €1,571.8mn (€1,211.7mn in 2018).

The revenue from taxes on income and wealth also increased significantly (by €122.4mn, that is +9.6%) and reached €1,391.0 mn as opposed to €1,268.6mn in the corresponding period of 2018. Capital transfers received by the State reached €155.1mn, an increase of €89.9mn, which corresponds to +137.9%, as opposed to the €65.2mn received during the corresponding period of 2018.

Revenue received from taxes on production and imports recorded an increase of €60.2mn(+2.8%) to reach €2,174.9mn, as compared to €2,114.7 mn received in 2018. However, net VAT revenue (that is included in this category) registered an increase of €84.2mn(+6.4%) and reached €1,389.9mn in 2019, as compared to €1,305.7mn in 2018.

Property income recorded a €21.0 mn increase (+29.2%) to reach €92.9 mn during the period of January-August 2019 (as compared to €71.9mn in January-August 2018).

The remaining two categories of revenue recorded a decrease. Current transfers were reduced by €17.0mn(-12.8%) to total €116.3mn during the said period (€133.3 mn in 2018), while revenue for the sale of goods and services were reduced by 2.2% (or €8.3mn) to total €372.0 mn in 2019 as compared to €380.3mn in January-August 2018.