Cyprus Government Fiscal Surplus Remains Steady at 4 Percent of GDP

by THEFUTURE.TEAM

October 10, 2025

Overview of Fiscal Health

Preliminary figures released by the Cyprus Statistical Service (Cystat) reveal that for the period from January to August 2025, the general government recorded a fiscal surplus of €1.39 billion, maintaining a robust level at 4 percent of GDP. This represents a modest increase in nominal terms compared to a €1.33 billion surplus reported for the corresponding period in 2024.

Revenue Gains Across Multiple Streams

Government revenue experienced significant growth, rising by €641.10 million (6.80 percent) to reach €10.10 billion. Notably, income and wealth taxes climbed by €178.30 million (7.10 percent) to total €2.70 billion, while social contributions saw an increase of €243.80 million (8.40 percent) to €3.14 billion. Property income nearly doubled, advancing by €57.40 million to €121.80 million compared to the previous year. Additionally, taxes on production and imports, net VAT, the sale of goods and services, and capital transfers all recorded positive increments, illustrating a diversified expansion in revenue sources.

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Managed Expenditures Amid Expanding Capital Investments

Expenditures grew by €574.30 million (7.10 percent) to reach €8.71 billion. Key expenditure components—including employee compensation, social benefits, and intermediate consumption—marked their upward trajectory. Additionally, the capital account witnessed a notable surge, increasing by €131.80 million (22.90 percent) to €707 million. This expansion was driven by a rise in gross capital formation and other capital expenditures, although interest payments and certain transfers registered modest declines.

Disparate Performance Within Government Subsectors

An analysis by Cystat indicates a differential fiscal performance across government entities. The central government enjoyed a surplus of €622 million, up from €432.30 million in 2024, reflecting strengthened fiscal discipline. In contrast, the local government moved from a surplus to a deficit, posting a shortfall of €32.70 million compared to a €14.60 million surplus the previous year. Social security funds recorded a decline in their surplus, underscoring potential areas for further review.

Conclusion

Cyprus’ fiscal performance in early 2025 underscores a stable surplus and diversified revenue gains. While overall results indicate fiscal solidity, the variations between central and local government finances may prompt closer scrutiny in the run-up to the full-year assessment. The government’s ability to balance revenue growth with controlled expenditure remains a critical focal point for sustaining economic stability in the coming months.

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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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