Cyprus recorded a general government fiscal surplus of €552.9 million during the first five months of 2026, according to preliminary figures released by the Cyprus Statistical Service (Cystat). Higher tax revenue and stronger social contributions helped offset continued growth in public spending.
Revenue Growth Outpaced Spending
The surplus for the January-to-May period amounted to 1.4% of gross domestic product, compared with €544.5 million, or 1.5% of GDP, in the corresponding period of 2025.
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Total government revenue increased by €282.5 million, or 4.8%, reaching €6.2 billion from €5.92 billion a year earlier.
Income Tax, VAT And Contributions Drive Gains
Taxes on income and wealth recorded the largest increase, rising by €115.2 million, or 8.4%, to €1.49 billion. Social contributions also posted solid growth, climbing by €102.2 million, or 5.2%, to €2.07 billion.
Revenue from taxes on production and imports rose by €93.1 million, or 4.9%, to €2.00 billion. Within that category, net VAT receipts increased by €138 million, or 11.0%, to €1.39 billion.
Additional support came from capital transfers, which rose to €38.8 million from €12.4 million, and from the sale of goods and services, which increased by €9.4 million to €433.2 million.
Those gains were partly offset by lower property income, which declined by €24.2 million to €68.5 million, and a €39.6 million fall in current transfers to €115.7 million.
Expenditure Continues To Expand
Government expenditure rose by €274.1 million, or 5.1%, to €5.65 billion, compared with €5.38 billion in the same period of 2025.
Intermediate consumption increased by €52 million to €590.3 million, while compensation of employees, including imputed social contributions and civil servants’ pensions, rose by €47.6 million to €1.64 billion.
Social benefits recorded the largest increase in absolute terms, climbing by €108.2 million, or 4.9%, to €2.31 billion. Interest payments also rose significantly, increasing by €32.3 million, or 15.7%, to €238.4 million.
Current transfers climbed by €70.5 million, or 19.6%, reaching €429.3 million.
Capital Spending Softens
Capital expenditure moved in the opposite direction, falling by €26.8 million, or 6.0%, to €418.7 million. Gross capital formation declined by €25.4 million to €327.7 million, while other capital expenditure edged down to €90.9 million. Subsidies also decreased, dropping by €9.6 million to €31.8 million.
Preliminary Data Carry Caveats
Cystat noted that the figures remain preliminary, with estimates used for several general government entities, particularly within the local government subsector, as complete data had not yet been submitted by the relevant authorities.
