Cyprus Posts €1.59 Billion Fiscal Surplus As Revenue Growth Outpaces Spending

by THEFUTURE.TEAM

Cyprus recorded a general government fiscal surplus of €1.59 billion, equivalent to 4.1% of GDP, in January-August 2026, according to preliminary data from the Statistical Service.

The surplus increased by €319.8 million from €1.269 billion, or 3.5% of GDP, in the same period of 2025. Total revenue grew by 6% year-on-year, outpacing the 3.3% rise in expenditure.

Tax Revenue And Social Contributions Drive Growth

Total government revenue reached €10.842 billion, up €615.8 million from €10.226 billion a year earlier.

Income and wealth tax receipts rose by 14.2% to €3.080 billion, an increase of €382.4 million. Social contributions climbed 7% to €3.363 billion, while taxes on production and imports increased 8.2% to €3.342 billion.

Net value-added tax (VAT) revenue recorded particularly strong growth, rising 14.7% to €2.345 billion from €2.045 billion in January-August 2025.

Several other revenue categories declined. Capital transfers fell by €101.7 million to €89.9 million, while revenue from goods and services dropped by €14 million to €665 million. Interest and dividend receipts decreased by €37.7 million to €85.2 million, and current transfers fell by €84.9 million to €217.3 million.

Government Expenditure Reaches €9.25 Billion

Total expenditure increased by €296 million to €9.253 billion, compared with €8.957 billion in the corresponding period last year.

Social benefits rose 5.2% to €3.804 billion, an increase of €188.9 million. Compensation of employees grew by €42.2 million, or 1.6%, to €2.636 billion. Intermediate consumption increased by 10.3% to €1.014 billion, while interest payments rose 2.2% to €298.5 million.

Capital expenditure moved in the opposite direction, declining 5.3% to €819.8 million. Gross fixed capital formation fell 1.8% to €603.1 million, while other capital transfers dropped 13.6% to €216.7 million.

Surpluses Recorded Across All Government Sectors

The central government surplus rose to €735.1 million from €482.1 million in January-August 2025.

Local government recorded a surplus of €3 million, reversing a deficit of €23.6 million a year earlier. Meanwhile, the surplus of social security funds increased to €851 million from €810.8 million.

The Statistical Service cautioned that some figures are based on estimates because reporting from certain authorities remains incomplete. This particularly affects several general government entities within the local government sector.

Back

Become a Speaker

Become a Speaker

Become a Partner

Subscribe for our weekly newsletter