Cyprus recorded the European Union’s highest government budget surplus in 2025, at 3.6% of gross domestic product (GDP), according to figures released by the Cyprus Statistical Service (Cystat) and Eurostat.

The surplus amounted to €1.36 billion, based on audited data compiled under the European Commission’s Excessive Deficit Procedure. Government debt stood at €20.05 billion, equivalent to 52.3% of GDP.

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Cyprus Among Five EU Countries With Budget Surpluses

Cyprus was one of only five EU member states to record a budget surplus in 2025. Denmark followed with 2.9% of GDP, ahead of Greece at 2%, Ireland at 1.8% and Portugal at 0.7%.

All other member states recorded deficits. Romania had the largest, at 7.8% of GDP, followed by Poland at 7.2%, Belgium at 5.2% and France at 5.1%. Eleven countries reported deficits of at least 3% of GDP, the EU’s reference threshold.

Government Revenue Rises 7.7%

Cyprus’ government revenue increased by 7.7% in 2025, rising by €1.14 billion to €15.9 billion from €14.76 billion a year earlier, Cystat reported.

Social contributions rose by €379.8 million, or 8.4%, to €4.9 billion, while taxes on income and wealth increased by €379.1 million, or 10%, to €4.18 billion. Taxes on production and imports grew by 1.4% to €4.75 billion.

Revenue from the sale of goods and services climbed 18.1% to €1.06 billion, while other current transfers increased by 21.4% to €480.1 million. Capital transfers and property income also rose.

Net value added tax was the main exception, declining by €16 million, or 0.5%, to €3.15 billion.

Capital Spending Drives Higher Expenditure

Government expenditure rose by 9.2% in 2025, increasing by €1.22 billion to €14.54 billion from €13.31 billion in 2024.

Compensation of employees, including imputed social contributions and civil servants’ pensions, grew by 7.6% to €4.17 billion. Social transfers increased by 5.3% to €5.59 billion, while intermediate consumption reached €1.59 billion.

Capital expenditure recorded the sharpest increase, surging by 46.4% to €1.76 billion from €1.2 billion in 2024. The rise reflected higher gross capital formation and other capital expenditure.

Meanwhile, subsidies fell by 18.6% to €139.6 million, while property income payable edged down.

Cyprus Outperforms EU And Euro Area Averages

Across the EU, government expenditure amounted to 49.4% of GDP in 2025, compared with revenue of 46.3%. In the euro area, expenditure reached 49.8% of GDP and revenue 46.8%.

Cyprus’ surplus reflects revenue growth outpacing expenditure, despite higher public investment. The country’s fiscal performance stood out against a wider EU picture in which most member states continued to run budget deficits.