Cyprus recorded a general government surplus of €567.1 million in the first quarter of 2026, according to preliminary figures released by the Cyprus Statistical Service (Cystat). Although slightly below the €600.6 million recorded a year earlier, the country remained in surplus as government revenue continued to grow despite higher public spending. Separate Eurostat data showed Cyprus posting a seasonally adjusted surplus equal to 0.4% of GDP during the quarter.

Revenue Growth Outpaced Expenditure Pressure

Government revenue increased 5.8% year on year to €3.82 billion from €3.61 billion, driven mainly by stronger tax receipts and social contributions.

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Social contribution revenue rose 8.2% to €1.28 billion, while taxes on income and wealth climbed 10.9% to €1.09 billion. Revenue from taxes on production and imports also increased, reaching €1.13 billion, supported in part by a 5.5% rise in net value-added tax (VAT) receipts to €764.3 million.

Performance across the remaining revenue categories was mixed. Capital transfers edged up to €5 million, whereas other current transfers declined to €59.1 million. Revenue from the sale of goods and services fell 7.2% to €243.8 million, while property income dropped 31.2% to €13 million.

Spending Continued To Expand

At the same time, government expenditure rose 8% to €3.25 billion from €3.01 billion in the first quarter of 2025.

Social transfers increased 6.5% to €1.36 billion, accompanied by a 2.4% rise in compensation of employees, including imputed social contributions and civil servants’ pensions, to €974.9 million.

Spending also increased across several other categories. Intermediate consumption climbed 9.3% to €303.9 million, other current expenditure jumped 31.8% to €245.4 million, and property income payable rose to €79 million from €72.8 million a year earlier.

Capital expenditure reached €271.8 million, comprising €188.9 million in capital formation and €82.9 million in capital transfers, compared with €223.5 million in the corresponding period of 2025. Subsidies were the only major spending category to decline, falling 19.5% to €16.1 million.

Cyprus Remains A Relative Outlier In Europe

Eurostat’s seasonally adjusted figures showed Cyprus’ budget surplus easing to 0.4% of GDP from 1.2% in the fourth quarter of 2025 and 0.9% in the third quarter.

Even so, the country remained one of the few EU member states to record a surplus. Across the euro area, the government deficit stood at 3.1% of GDP, compared with 3.2% in the previous quarter, while the European Union also posted a deficit of 3.1%, improving from 3.4%.

Revenue across the euro area represented 47.1% of GDP, slightly below the previous quarter’s 47.3%, while expenditure eased to 50.2% from 50.4%. Across the European Union, revenue accounted for 46.6% of GDP compared with 46.7% in the previous quarter, as expenditure declined to 49.8% from 50.1%.