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Cyprus recorded a €653.6 million budget surplus in the third quarter of 2025, according to preliminary figures released by the Statistical Service, good news for the country’s finances, even if it’s a slimmer cushion than last year.
To put it simply: the state earned more than it spent between July and September. That surplus is lower than the €871 million recorded during the same period in 2024, but it’s still a solid buffer at a time when public spending pressures are clearly growing.
Where the money came from
Government income rose modestly, up 2.6% compared to last year, reaching just over €4.1 billion.
A big chunk of that increase came from:
- Social contributions, which climbed by nearly €63 million, meaning more money flowing into the system from employers and workers.
- VAT revenues, which rose by about €40 million, a sign that consumers are still spending, or at least spending enough to keep tax receipts healthy.
- Smaller bumps also came from services provided by the state and capital transfers.
In short, the government’s revenue taps stayed open, even if they weren’t gushing.
Where the money went
Here’s the part that matters just as much: spending jumped sharply, up 10.3%, reaching €3.45 billion.
The biggest increases were:
- Social benefits, which rose by almost €98 million, reflecting higher support payments.
- Public sector pay and pensions, up more than €50 million.
- Capital spending, which nearly doubled, driven by higher investments and capital transfers, money that usually goes into infrastructure, projects and long-term development.
Not all spending went up. Subsidies fell noticeably, and the state paid less in interest and property-related costs, easing some pressure.
What this means for the country
The takeaway is mixed but important.
Cyprus is still running a surplus, which helps protect the economy against shocks and keeps international confidence intact. At the same time, expenses are rising much faster than income, largely due to social support and investment spending.
That’s not necessarily bad, especially if the money is being used wisely, but it does mean the room for mistakes is getting smaller.
For people who don’t love budget talk, here’s the bottom line: the state’s finances are healthy for now, but the pace of spending is something policymakers will need to keep a close eye on.
Because in public finances, today’s surplus can disappear faster than you think.
