The Cyprus government has reported a robust fiscal performance for the January–October 2025 period, posting a surplus of €1.119 billion, equivalent to 3.1 percent of GDP. This figure, released by the Statistical Service (Cystat), reflects a slight contraction from the €1.3209 billion surplus, or 3.8 percent of GDP, recorded during the same timeframe in 2024.

Revenue Growth Anchored by Diversified Sources

Total government revenue climbed to €12.33 billion, marking an increase of €658.5 million (5.6 percent) compared to last year’s €11.67 billion. This surge was underpinned by notable gains across several revenue streams. Income and wealth taxes rose by €154.6 million (5.3 percent) to €3.05 billion, while social contributions experienced an 8.2 percent increase, adding €296.3 million to reach €3.91 billion.

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Property income delivered an impressive 40.1 percent boost, rising by €38.2 million to €133.5 million. In contrast, taxes on production and imports incrementally increased by 0.2 percent, reaching €3.95 billion, despite a modest decline in net VAT revenue of €24.8 million (0.9 percent) to €2.65 billion.

Additional growth was observed in the sale of goods and services, which surged by €137.4 million (18.7 percent) to €871.3 million, while capital transfers surged by an impressive 64.9 percent, adding €46.2 million to total €117.4 million. However, current transfers receded by 6.7 percent, falling by €21.9 million to €304.6 million.

Escalating Expenditures Reflect Strategic Investments

Expenditure for the period climbed to €11.21 billion, an increase of €860.4 million (8.3 percent) from €10.35 billion recorded in the same period in 2024. Key spending categories registered notable changes. Compensation of employees increased by €201 million (6.7 percent) to €3.20 billion, with social benefits rising by €299.7 million (7.1 percent) to €4.53 billion.

Intermediate consumption grew by €72.5 million (6.6 percent) to €1.18 billion, while interest payments remained stable at €358.7 million. Conversely, subsidies and current transfers contracted, with decreases of €10.7 million (8.3 percent) to €118.5 million and €10.4 million (1.6 percent) to €658.4 million, respectively.

Importantly, the capital account saw a substantive increase of €307.8 million (36 percent) to reach €1.16 billion, driven by a 12.3 percent growth in gross capital formation, totaling €822.3 million, and a doubling of other capital expenditure to €341.5 million. It is worth noting that, for several entities within the general government — particularly the local government subsector — estimates were applied due to incomplete data submissions.

This fiscal report underscores the government’s balanced approach to revenue enhancement and strategic expenditure, reflecting not only immediate gains but also a commitment to longer-term capital investments. Such measures provide a nuanced view into the evolving financial landscape of Cyprus, as policymakers navigate the interplay between revenue sources and fiscal outlays.