Breaking news

Cyprus Q3 2025 Fiscal Review: Surplus Shrinks Amid Revenue Gains And Rising Expenditure

by THEFUTURE.TEAM

Government Surplus And Revenue Overview

Cyprus reported a general government surplus of €653.6 million in the third quarter of 2025, marking a decrease from the €871.0 million surplus recorded during the same period in 2024. This figure, derived from preliminary results released by Cystat, encapsulates fiscal performance for the July–September 2025 period.

Incremental Revenue Performance

Notwithstanding the lower surplus, total government revenue increased by €104.2 million (2.6%), reaching €4.10 billion compared to €3.99 billion in the corresponding quarter of 2024. The growth was driven by several key factors:

  • Social contributions surged by €62.5 million (5.7%), up to €1.15 billion.
  • Taxes on income and wealth experienced a modest increase of €10.9 million (0.8%), totalling €1.30 billion.
  • Taxes on production and imports climbed by €7.1 million (0.6%), with net VAT revenue alone rising by €40.2 million (4.8%) to €886.4 million.
  • Additional gains were seen in property income receivable, which increased by €3.0 million (13.5%), and capital transfers, which grew by €6.0 million to €10.8 million.
  • Furthermore, revenue from the sale of goods and services advanced by €15.1 million (6.1%) to reach €260.9 million.

Escalating Expenditure Patterns

The fiscal report also reveals notable increases in public spending. Total government expenditure rose by €321.5 million (10.3%) to €3.45 billion in Q3 2025, up from €3.12 billion in the previous year. This expansion in spending is detailed as follows:

  • Social transfers increased by €97.8 million (7.9%) to €1.33 billion.
  • Employee compensation, which includes imputed social contributions and pensions for civil servants, rose by €50.5 million (5.6%) to €955.6 million.
  • Intermediate consumption saw a slight rise of €4.5 million (1.2%) to €382.0 million.
  • The capital account experienced a substantial upswing, jumping by €223.7 million (84.2%) to €489.3 million, reflecting enhanced capital formation and transfers.
  • Conversely, property income payable dropped by €26.1 million (25.7%) to €75.3 million, while other current expenditures and subsidies declined by €16.1 million (8.6%) and €12.6 million (25.3%) respectively.

Implications For Fiscal Policy

The mixed performance in key fiscal indicators highlights a nuanced picture. The increased revenue streams underscore a growing tax base and improved collection efficiency, yet the lower surplus and rising expenditures suggest a need for balanced fiscal strategies moving forward. Policymakers must address the challenges posed by escalating public spending while leveraging the gains in revenue to sustain long-term economic stability.

Conclusion

The Q3 2025 fiscal figures for Cyprus provide valuable insights into the country’s economic trajectory, offering both promising trends and critical areas for intervention. As decision-makers refine their fiscal policies, the interplay between revenue growth and expenditure management will remain central to Cyprus’s broader economic agenda.

Mercedes-Benz Posts Higher Profit Despite China Slowdown

by THEFUTURE.TEAM

Mercedes-Benz reported stronger-than-expected second-quarter results, lifting its shares on Tuesday despite mounting pressure from Chinese automakers and a weaker outlook for sales and revenue.

The earnings provided a boost for Europe’s auto sector, where manufacturers continue to grapple with tariffs, softer demand and intensifying competition from Chinese rivals. Volkswagen, Mercedes-Benz and BMW have all accelerated restructuring efforts in response.

Cost Discipline Lifts Quarterly Profit

Mercedes-Benz shares rose as much as 5.9% following the results before trimming gains to trade 3.5% higher by 1118 GMT. The company reaffirmed its profit margin guidance for its core passenger car business after reporting an adjusted return on sales of 4.0% for the second quarter, above market expectations and within its 3% to 5% target range.

“In an environment where some automakers are ringing alarm bells on their competitive positioning, Mercedes delivered a clear and confident message,” Morningstar analyst Rella Suskin said.

Second-quarter operating profit increased 22% to €1.5 billion ($1.7 billion), despite a 3% decline in revenue. Lower administrative and research and development costs, together with strong performances from the financial services and vans divisions, supported earnings, while the results also included a €131 million gain related to the planned sale of leasing subsidiary Athlon.

China Remains The Key Pressure Point

Despite stronger profitability, Mercedes continues to face a challenging market environment. Sales in China fell 30% during the second quarter, prompting the company to abandon earlier expectations for stable car sales and group revenue. It now expects both to decline slightly from a year earlier.

BMW also lowered its outlook in June following a deeper-than-expected slowdown in China, highlighting the pressure facing Germany’s premium carmakers. At the same time, Mercedes said Chinese manufacturers are increasingly expanding into European markets, although Chief Executive Ola Kaellenius said their focus remains on higher-volume segments rather than the premium market.

“But that is not a reason to sit back and be relaxed,” he said.

Manufacturing Shift Continues

Mercedes is also reshaping its manufacturing footprint. The company said its German factories will undergo a more aggressive push toward leaner production, although it declined to provide further details while talks with labour representatives continue. Production is also being expanded in lower-cost Eastern European locations, including Hungary, where the company is increasing capacity at its Kecskemet plant, as well as in Poland.

Chief Financial Officer Harald Wilhelm said the full-year margin for the passenger car division is expected to come in at the lower end of the company’s guidance range, reflecting a higher share of electric vehicle sales in Europe, which remain more expensive to produce and continue to weigh on profitability.

“We must continue to work flat out to reduce costs so that we can remain competitive on the prices of our products,” Kaellenius said.

Uol
Aretilaw firm
eCredo
The Future Forbes Realty Global Properties

Become a Speaker

Become a Speaker

Become a Partner

Subscribe for our weekly newsletter