Cyprus Budget Surplus Narrows As Fiscal Expenditures Accelerate In Early 2025

by THEFUTURE.TEAM

October 31, 2025

Overview Of Fiscal Trends

Preliminary data from the Cyprus Statistical Service indicates a contraction in the budget surplus for the first nine months of 2025. The surplus shrank to €1.17 billion—3.2% of GDP—from €1.34 billion, or 3.9% of GDP, recorded during the same period last year. This decline reflects a scenario where government spending has outpaced revenue gains.

Robust Revenue Gains

Total government revenues rose by €650.10 million (6.2%), reaching €11.20 billion compared to €10.55 billion in 2024. Key revenue streams showed significant improvements: taxes on income and wealth increased by €182.20 million (6.7%) to €2.89 billion, while social contributions grew by 7.3% to €3.47 billion. Notably, property income surged by 77.6% to €128.60 million, and revenue from the sale of goods and services climbed 17.9% to €765.00 million. However, taxes on production and imports and VAT collections evidenced only modest growth.

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Accelerating Expenditures

On the expenditure side, total spending experienced a significant rise of €824.90 million (9.0%), reaching €10.03 billion. Increases were evident in several key areas: employee compensation—including social contributions and civil service pensions—grew by 6.5% to €2.87 billion, and social benefits advanced by 7.2% to €4.08 billion. Intermediate consumption saw an uptick of 7.6%, while the capital account expanded dramatically by 55.9% to €1.04 billion, driven by a 29.0% increase in gross capital formation and a marked rise in other capital expenditures. Conversely, declines were noted in interest payments, current transfers, and subsidies.

Implications For fiscal Management

The fiscal report underscores a dynamic shift in Cyprus’s budgetary landscape, where revenue enhancements are partially counterbalanced by significant upticks in expenditure, particularly in capital investments. Such trends necessitate careful fiscal management to balance growth initiatives with budgetary discipline. Analysts and policymakers will be closely monitoring these developments as they assess the broader implications for economic stability and long-term fiscal sustainability.

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Central Bank Of Cyprus Balance Sheet Reflects Strong Eurosystem Position

by THEFUTURE.TEAM

February 17, 2026

Overview Of Financial Stability

The Central Bank of Cyprus (CBC) has released its latest balance sheet, reaffirming its steadfast role within the Eurosystem. The balance sheet, featuring total assets and liabilities of €29.545 billion, underscores the institution’s stable financial posture at the close of January 2026.

Asset Allocation And Strategic Holdings

Governor Christodoulos Patsalides issued the balance sheet, which details the CBC’s asset composition under the Eurosystem framework. Notably, the bank’s gold and gold receivables amounted to €1.635 billion, providing a significant hedge and stability to its balance sheet. Additional asset categories include claims on non-euro area residents denominated in foreign currency at €1.099 billion, while claims on euro area residents in both foreign and domestic currency add further depth to its portfolio.

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The most substantial asset category, intra-Eurosystem claims, reached €19.438 billion, an indication of the CBC’s deep integration with its European counterparts. Furthermore, euro-denominated securities held by euro area residents contributed €6.587 billion. Despite a marked emphasis on these areas, lending to euro area credit institutions in monetary policy operations recorded no activity during the period.

Liability Structure And Monetary Policy Implications

On the liabilities side, banknotes in circulation contributed €3.218 billion. Liabilities to euro area credit institutions associated with monetary policy operations were notably the largest single category, totaling €17.636 billion. Supplementary liabilities included those to other euro area residents, which aggregated to €4.989 billion, with government liabilities playing a predominant role at €4.754 billion.

Other liability items, such as claims related to special drawing rights allocated by the International Monetary Fund at €494.193 million, and provisions of €596.571 million, further articulate the CBC’s exposure. Revaluation accounts stood at €1.643 billion, and overall capital and reserves were confirmed at €333.822 million, completing the picture of a well-capitalized institution.

Conclusive Insights And Strategic Alignment

The detailed breakdown illustrates the CBC’s sizeable intra-Eurosystem exposures, reinforcing its central role within Europe’s monetary landscape. With an asset-liability balance maintained at €29.545 billion, the CBC’s financial position remains robust, indicating a commitment to structural stability and strategic risk management.

This fiscal disclosure not only provides transparency into the CBC’s operations but also serves as a benchmark for comparative analysis among other central banks within the Eurosystem, highlighting the intricate balance between asset liquidity, regulatory oversight, and monetary policy imperatives.

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