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The Cypriot government spent nearly €143 million more than it brought in during the second quarter of 2026, as rising costs outpaced an increase in revenue, preliminary figures from the Statistical Service show.
The deficit for April through June was €142.7 million, up from €127.9 million in the same period last year.
Put simply, the government collected more money than it did a year earlier, but its spending grew by even more. The figures cover general government, which includes central government, local authorities, and social security funds.
Total revenue rose 2% to €3.60 billion, while expenditure increased 2.3% to €3.74 billion.
More money from VAT and contributions
Among the biggest increases in revenue came from social contributions and taxes on production and imports.
Social contributions rose by €81.1 million to €1.26 billion. Net VAT revenue, the amount collected after refunds, climbed by €140.5 million, or 19%, to €879.4 million.
That does not necessarily mean VAT rates went up. The figures show how much was collected but do not by themselves explain how much of the increase came from spending, prices, or other factors.
Revenue from income and wealth taxes fell slightly, while several other sources of income, including capital transfers, also declined.
Social benefits and running costs rise
On the spending side, social benefits increased by €77.2 million to €1.54 billion. Spending on staff, including imputed social contributions and civil servant pensions, rose by €39 million to just over €1 billion.
The cost of goods and services used to run government operations also climbed, increasing by nearly 20% to €434.6 million.
Meanwhile, capital spending and transfers fell by €99.4 million to €310.9 million, largely because of a drop in capital transfers. Subsidies and other current expenses also decreased.
For households, the figures offer a snapshot of where public money is coming from and going. The three-month deficit means spending exceeded revenue during that quarter; it does not, on its own, tell us whether the government will end the full year with a deficit or a surplus.
