Government revenue boosts Cyprus surplus to €702.5 million

The Republic of Cyprus recorded a significant fiscal surplus of €702.5 million for the period of January to July 2024, according to preliminary General Government fiscal results, released on Friday by the Statistical Service of Cyprus.

This figure represents 2.2% of the country's GDP and marks a substantial increase from the €345.9 million surplus (1.2% of GDP) reported during the same period in 2023.

The fiscal improvement is largely attributed to a surge in government revenue, which increased by €953.1 million, or 14.2%, year-on-year, reaching €7.662 billion.

Key contributors to this growth include revenue from the sale of goods and services that increased by €163.3 million (43.5%) to €538.7 million, current transfers that rose by €43.6 million (25.8%) to €212.3 million and social contributions that saw a significant rise of €327.9 million (16.2%), totaling €2.348 billion.

Property income also increased by €21.0 million (34.5%) to €81.9 million, as well as taxes on production and imports that increased by €175.7 million (7.3%) to €2.584 billion and net VAT revenue that rose by €148.4 million (9.5%) to €1.718 billion.

Taxes on income and wealth increased by €238.5 million (14.6%) to €1.869 billion.

However, there was a decline in capital transfers, which fell by €16.9 million (-37.2%) to €28.5 million.

Τotal government expenditure during the period of January to July 2024 rose by €596.6 million, or 9.4%, reaching €6.960 billion. Among the most significant areas of expenditure growth, compensation of employees increased by €232.8 million, or 12.2%, to €2.138 billion. Social benefits also saw a substantial rise, growing by €208.1 million, or 8.1%, to €2.772 billion.

Intermediate consumption was up by €109.5 million, or 17.8%, amounting to €723.1 million. Current transfers increased by €99.1 million, or 22.9%, to €531.8 million, while interest payable grew by €27.9 million, or 11.1%, to €279.6 million.

On the capital expenditure front, the government managed to reduce spending, with the capital account declining by €61.8 million, or 12.4%, to €434.9 million. This reduction included a notable decrease in gross capital formation, which fell by €74.0 million, or 17.4%, to €352.3 million. Οther capital expenditures saw an increase of €12.2 million, or 17.3%, bringing the total to €82.6 million. Additionally, subsidies were reduced by €19.1 million, or 19.2%, to €80.6 million.