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Cyprus Government Posts Strong Fiscal Metrics Amid Revenue and Expenditure Shifts

by THEFUTURE.TEAM

December 5, 2025

The Cyprus government has reported a robust fiscal performance for the January–October 2025 period, posting a surplus of €1.119 billion, equivalent to 3.1 percent of GDP. This figure, released by the Statistical Service (Cystat), reflects a slight contraction from the €1.3209 billion surplus, or 3.8 percent of GDP, recorded during the same timeframe in 2024.

Revenue Growth Anchored by Diversified Sources

Total government revenue climbed to €12.33 billion, marking an increase of €658.5 million (5.6 percent) compared to last year’s €11.67 billion. This surge was underpinned by notable gains across several revenue streams. Income and wealth taxes rose by €154.6 million (5.3 percent) to €3.05 billion, while social contributions experienced an 8.2 percent increase, adding €296.3 million to reach €3.91 billion.

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Property income delivered an impressive 40.1 percent boost, rising by €38.2 million to €133.5 million. In contrast, taxes on production and imports incrementally increased by 0.2 percent, reaching €3.95 billion, despite a modest decline in net VAT revenue of €24.8 million (0.9 percent) to €2.65 billion.

Additional growth was observed in the sale of goods and services, which surged by €137.4 million (18.7 percent) to €871.3 million, while capital transfers surged by an impressive 64.9 percent, adding €46.2 million to total €117.4 million. However, current transfers receded by 6.7 percent, falling by €21.9 million to €304.6 million.

Escalating Expenditures Reflect Strategic Investments

Expenditure for the period climbed to €11.21 billion, an increase of €860.4 million (8.3 percent) from €10.35 billion recorded in the same period in 2024. Key spending categories registered notable changes. Compensation of employees increased by €201 million (6.7 percent) to €3.20 billion, with social benefits rising by €299.7 million (7.1 percent) to €4.53 billion.

Intermediate consumption grew by €72.5 million (6.6 percent) to €1.18 billion, while interest payments remained stable at €358.7 million. Conversely, subsidies and current transfers contracted, with decreases of €10.7 million (8.3 percent) to €118.5 million and €10.4 million (1.6 percent) to €658.4 million, respectively.

Importantly, the capital account saw a substantive increase of €307.8 million (36 percent) to reach €1.16 billion, driven by a 12.3 percent growth in gross capital formation, totaling €822.3 million, and a doubling of other capital expenditure to €341.5 million. It is worth noting that, for several entities within the general government — particularly the local government subsector — estimates were applied due to incomplete data submissions.

This fiscal report underscores the government’s balanced approach to revenue enhancement and strategic expenditure, reflecting not only immediate gains but also a commitment to longer-term capital investments. Such measures provide a nuanced view into the evolving financial landscape of Cyprus, as policymakers navigate the interplay between revenue sources and fiscal outlays.

The Future Forbes Realty Global Properties

Rolls-Royce Raises Guidance As Defense And Power Systems Drive Growth

Rolls-Royce raised its full-year profit and cash flow guidance after reporting stronger-than-expected first-half results, supported by growth across its civil aerospace, defense and power systems businesses.

Underlying operating profit rose 46% year on year to £2.5 billion ($3.3 billion) in the first six months of 2026, while revenue increased more than 24% to £11.3 billion.

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The company now expects full-year underlying operating profit of £4.7 billion to £4.9 billion, up from previous guidance of £4 billion to £4.2 billion. It also raised its free cash flow forecast to £3.8 billion to £4 billion, compared with £3.6 billion to £3.8 billion previously.

Shares rose as much as 6% in early trading before paring gains to trade about 4% higher.

Data Center Demand Supports Power Systems

Chief Financial Officer Helen McCabe told CNBC that orders in Rolls-Royce’s data center power business increased by more than 50% in the first half as operators invested in backup and on-site power systems.

The company has benefited from growing demand for power infrastructure as data center operators expand capacity.

Defense Spending Provides Additional Support

McCabe also said Rolls-Royce expects to benefit from higher defense spending in the U.K. and across NATO countries. She cited the U.K.’s long-term defense investment plan, which provides funding visibility through 2030 and beyond.

“We’ve had very positive initial conversations with the new government,” McCabe said, adding that the company supports its focus on growth, defense and industrial manufacturing.

Turnaround Continues

Chief Executive Tufan Erginbilgic said the company’s transformation strategy continued to deliver results. “Our transformation continues to deliver,” he said in a statement. “We have unlocked new growth opportunities across the Group.”