Cyprus recorded a fiscal surplus of €1.24 billion in 2025, equivalent to 3.4% of GDP, according to preliminary data from the Cyprus Statistical Service. Public debt stood at €20.08 billion, or 55% of GDP, remaining below the European Union reference threshold.

Ensuring Fiscal Stability

The figures were validated under the Excessive Deficit Procedure, which assesses member states’ compliance with fiscal rules. Verification under this framework indicates alignment with EU budgetary requirements and supports Cyprus’ position as a fiscally stable economy within the bloc.

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Revenue Growth Dynamics

Total revenues increased by €1.17 billion, or 7.9% year on year, to €15.92 billion, up from €14.75 billion in 2024. Growth was supported by higher tax and contribution inflows. Revenue from income and wealth taxes rose by 10% to €4.18 billion, while social contributions increased by 8.5% to €4.9 billion. Net VAT revenues declined slightly by 0.5% to €3.15 billion. At the same time, income from goods and services rose by 20.5%, and current transfers increased by 22.9%, contributing to overall revenue expansion.

Strategic Expenditure Management

Government spending rose by €1.37 billion, or 10.3%, to €14.68 billion, up from €13.31 billion in 2024. Social benefits increased by 6.7% to €5.66 billion, while compensation of public employees grew by 7.3% to €4.16 billion. Capital expenditure recorded the largest increase, rising by 45.1% to €1.75 billion, reflecting higher investment activity. Spending on property income payable declined by 4%, while subsidies fell by 14.4%.

Positioning For Future Growth

The 2025 results show continued surplus generation alongside controlled public debt levels. Maintaining debt below 60% of GDP aligns with EU benchmarks and supports fiscal flexibility, while revenue growth and investment spending indicate ongoing economic activity.