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Cyprus Q3 2025 Fiscal Review: Surplus Shrinks Amid Revenue Gains And Rising Expenditure

by THEFUTURE.TEAM

January 23, 2026

Government Surplus And Revenue Overview

Cyprus reported a general government surplus of €653.6 million in the third quarter of 2025, marking a decrease from the €871.0 million surplus recorded during the same period in 2024. This figure, derived from preliminary results released by Cystat, encapsulates fiscal performance for the July–September 2025 period.

Incremental Revenue Performance

Notwithstanding the lower surplus, total government revenue increased by €104.2 million (2.6%), reaching €4.10 billion compared to €3.99 billion in the corresponding quarter of 2024. The growth was driven by several key factors:

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Social contributions surged by €62.5 million (5.7%), up to €1.15 billion.
Taxes on income and wealth experienced a modest increase of €10.9 million (0.8%), totalling €1.30 billion.
Taxes on production and imports climbed by €7.1 million (0.6%), with net VAT revenue alone rising by €40.2 million (4.8%) to €886.4 million.
Additional gains were seen in property income receivable, which increased by €3.0 million (13.5%), and capital transfers, which grew by €6.0 million to €10.8 million.
Furthermore, revenue from the sale of goods and services advanced by €15.1 million (6.1%) to reach €260.9 million.

Escalating Expenditure Patterns

The fiscal report also reveals notable increases in public spending. Total government expenditure rose by €321.5 million (10.3%) to €3.45 billion in Q3 2025, up from €3.12 billion in the previous year. This expansion in spending is detailed as follows:

Social transfers increased by €97.8 million (7.9%) to €1.33 billion.
Employee compensation, which includes imputed social contributions and pensions for civil servants, rose by €50.5 million (5.6%) to €955.6 million.
Intermediate consumption saw a slight rise of €4.5 million (1.2%) to €382.0 million.
The capital account experienced a substantial upswing, jumping by €223.7 million (84.2%) to €489.3 million, reflecting enhanced capital formation and transfers.
Conversely, property income payable dropped by €26.1 million (25.7%) to €75.3 million, while other current expenditures and subsidies declined by €16.1 million (8.6%) and €12.6 million (25.3%) respectively.

Implications For Fiscal Policy

The mixed performance in key fiscal indicators highlights a nuanced picture. The increased revenue streams underscore a growing tax base and improved collection efficiency, yet the lower surplus and rising expenditures suggest a need for balanced fiscal strategies moving forward. Policymakers must address the challenges posed by escalating public spending while leveraging the gains in revenue to sustain long-term economic stability.

Conclusion

The Q3 2025 fiscal figures for Cyprus provide valuable insights into the country’s economic trajectory, offering both promising trends and critical areas for intervention. As decision-makers refine their fiscal policies, the interplay between revenue growth and expenditure management will remain central to Cyprus’s broader economic agenda.

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Bird Aviation Signs Long-Term EasyJet Maintenance Deal In Cyprus

Bird Aviation has signed a long-term agreement with easyJet to provide scheduled aircraft maintenance services at its Larnaca facilities, expanding the companies’ existing partnership and securing maintenance work in Cyprus for at least seven years.

Seven-Year Maintenance Agreement

The agreement runs for an initial seven years, with an option to extend for a further three years, Bird Aviation said.

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Under the contract, the company will operate two maintenance lines dedicated to scheduled heavy maintenance checks for easyJet’s Airbus A320 family aircraft. All work will be carried out at Bird Aviation’s facilities in Larnaca.

Expanding An Existing Partnership

Bird Aviation said the agreement builds on its long-standing relationship with easyJet and provides a long-term framework for heavy maintenance services. The company added that the contract strengthens the role of its Larnaca base in supporting easyJet’s fleet maintenance programme.

EasyJet Reports Lower Profit

The agreement comes as easyJet faces a more challenging operating environment. The airline recently reported that pre-tax profit fell 70% to £85 million in the April-to-June quarter, compared with £286 million a year earlier, largely because of a £105 million increase in fuel costs following renewed conflict in the Middle East.

The airline also said customers are booking flights closer to departure, affecting the timing of revenue. However, booking trends have improved during the peak summer season, although easyJet said the outlook remains dependent on late-season demand and fuel prices.

Takeover Bid And Industry Challenges

EasyJet is also the subject of competing takeover bids from two U.S. investment firms. The board initially accepted a £5.5 billion offer from Castlelake before recommending Apollo Global Management’s higher £5.7 billion proposal. Any transaction could face scrutiny under European Union airline ownership rules.

Meanwhile, Ryanair also reported weaker earnings, with quarterly profit falling 34% to €538 million after higher jet fuel costs during the Iran conflict. Despite the higher costs, both airlines said demand strengthened during the summer travel season.

“Pricing has been attractive, driving strong late booking demand for our flights and holidays,” easyJet chief executive Kenton Jarvis said.

“Our recent experience is that bookings become strong in the month of departure,” he said. “So I expect that as we move through August, bookings will be above where they were at this time last year.”