Cyprus grapples with €80 million surge in state budget deficit for 2023

The state budget deficit for 2023 increased by €80 million compared to the deficit recorded in 2022, according to the Fiscal Report of the Republic of Cyprus for 2023, submitted to the House of Representatives.

Specifically, the final state budget deficit for 2023 amounted to €0.98 billion compared to €0.90 billion in 2022.

Total revenues, excluding inflows from loan withdrawals and repayments issued, for 2023 amounted to €8.72 billion compared to €8.04 billion in 2022.

Total expenditures, excluding outflows for repayments and loan issuance, amounted to €9.17 billion in 2023 compared to €8.20 billion in 2022. Therefore, a state budget deficit before net flows due to borrowing €0.45 billion was recorded for 2023, compared to €0.16 billion in 2022.

Taking into account inflows from loan withdrawals and repayments (2023: €1.22 billion, 2022: €1.22 billion) and outflows from repayments and loan issuance (2023: €1.75 billion, 2022: €1.96 billion), the final state budget deficit for 2023 amounted to €0.98 billion (2022: €0.90 billion).

The main source of state revenues for 2023, excluding inflows from loan withdrawals and repayments issued, is taxation (€7.33 billion), which accounts for 84% of revenues. The percentage of revenues from taxation is distributed by 47% for indirect taxes and 37% for direct taxes.

The main categories of state expenditures include personnel wages, pensions, and grants (€3.20 billion), social benefits (€1.80 billion), and transfers (€1.36 billion).

The total amount of borrowing, excluding intra-governmental borrowing, amounted to €22.18 billion as of December 31, 2023 (2022: €22.87 billion as of December 31, 2022).

The Fiscal Report was submitted to the Minister of Finance by the Treasury of the Republic on March 8, 2024, and through the proposal of the Minister of Finance, it was approved by the Council of Ministers on March 19, 2024.