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Government Fiscal Performance Q3 2025: Surplus Decline Amid Revenue Gains and Elevated Spending

by THEFUTURE.TEAM

January 26, 2026

Fiscal Surplus Contraction in Q3 2025

Preliminary fiscal data for the period July–September 2025 indicate that the general government recorded a surplus of €653.6 million, a decline from the €871.0 million surplus achieved in the corresponding quarter of 2024. Detailed analysis from the Pleonasma series and related commentary on fiscal outcomes underscores the evolving economic landscape.

Revenue Enhancements

Total revenues for Q3 2025 increased by €104.2 million (+2.6%), reaching €4,099.0 million from €3,994.8 million in Q3 2024. Social contributions demonstrated robust growth, rising by €62.5 million (+5.7%) to €1,151.2 million from €1,088.7 million during the same period last year.

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Revenue gains were also observed in personal income and wealth taxation, which grew by €10.9 million (+0.8%) to €1,299.3 million compared to €1,288.4 million. Taxes on production and imports increased by €7.1 million (+0.6%), totaling €1,264.3 million; notably, net VAT revenue (after reimbursements) saw an encouraging rise of €40.2 million (+4.8%) to €886.4 million.

Other revenue segments, including receivables from property income, capital transfers, and goods and services provided, also registered modest improvements. Property income receivables climbed by €3.0 million (+13.5%), while capital transfers surged by €6.0 million to €10.8 million. Revenues from goods and services increased by €15.1 million (+6.1%) to €260.9 million. Conversely, current transfers experienced a slight contraction, decreasing by €0.4 million (-0.5%) to €87.2 million.

Escalating Expenditures

Total expenditures during the period advanced by €321.5 million (+10.3%), reaching €3,445.3 million versus €3,123.8 million in Q3 2024. Social benefits were the primary driver, with an increase of €97.8 million (+7.9%) to €1,334.6 million compared to €1,236.8 million previously.

Employee compensation—which encompasses statutory social contributions and public employee pensions—rose by €50.5 million (+5.6%), culminating at €955.6 million, up from €905.1 million. Intermediate consumption saw a moderate uptick of €4.5 million (+1.2%) to €382.0 million.

Notably, the capital account expenditures surged by €223.7 million (+84.2%) to €489.3 million, which includes €321.0 million in capital investments and €168.3 million in capital transfers, compared with €265.6 million the previous year. In contrast, payable property income contracted by €26.1 million (-25.7%) to €75.3 million, and other current expenditures fell by €16.1 million (-8.6%) to €171.2 million. Furthermore, subsidies experienced a marked reduction, dropping by €12.6 million (-25.3%) to €37.3 million from €49.9 million.

Implications for Policy and Economic Stability

The evolving fiscal indicators highlight the complex balance between revenue enhancements and growing expenditures amid changing economic conditions. The data, meticulously compiled and reported by the national statistical authority, point to significant challenges and opportunities for policymakers tasked with sustaining long-term fiscal stability.

Outlook

The detailed disaggregation of revenue and expenditure items is critical for informed decision-making in the public sector. As governments navigate the interplay of rising social contributions, evolving tax bases, and shifting capital investments, the Q3 2025 fiscal performance offers pivotal insights into the broader economic trajectory and the future direction of public finance management.

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Cyprus And Greece Outline Joint Tourism Plans For Summer 2026

Strategic Partnership Enhances Tourism Prospects

The Cyprus Tourism Authority (EOT Cyprus) presented proposals for summer 2026 focused on strengthening tourism cooperation between Cyprus and Greece, with joint efforts aimed at attracting visitors from long-haul markets.

Greece: The Top Destination For Cypriot Travelers

At an event on April 28, Athena Spakouri, Director of EOT Cyprus, said Greece is expected to remain the main travel destination for Cypriot residents, with plans extending beyond established locations to include lesser-known regions. This approach reflects a broader effort to diversify travel options while maintaining strong demand between the two countries.

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Complementary Destinations, Unified Vision

Building on this, Spakouri noted that Cyprus and Greece offer complementary tourism experiences rather than competing directly. Joint programmes are therefore being positioned to attract visitors from markets such as the United States and China, while tourism activity continues to be assessed in the context of broader geopolitical developments.

Robust Air And Sea Connectivity

Supporting this cooperation, Konstantinos Kollias said around 600,000 Cypriots travelled to Greece in 2025. Frequent flights, short travel times, and ferry connections between Limassol and Piraeus continue to facilitate movement between the two countries and sustain travel flows.

Diverse Tourism Offerings for a New Era

Konstantinos Kollias highlighted that Greece’s tourism portfolio spans from traditional seaside holidays to sectors such as cultural, religious, gastronomic, agritourism, ecotourism, spa, conference, and medical tourism.

This range reflects the expansion of tourism offerings across different segments and travel preferences. In parallel, Joseph Iosif referred to Greece as a “second homeland” for Cypriot travellers, pointing to longstanding cultural and travel links between the two countries.

Innovative Programs And Strengthened Connections

Building on this approach, the EOT strategy includes initiatives focused on gastronomic routes, cultural trails, thematic and religious tourism, as well as curated city breaks in destinations such as Athens and Thessaloniki. These programmes were presented at the event alongside references to historical, cultural, and religious connections between Cyprus and Greece, including remarks from Bishop Gregorios of Mesaoria.

Boosting Air Connectivity And Island Accessibility

At the same time, airlines including Aegean Airlines, Sky Express, and Cyprus Airways outlined plans to expand connections between Cyprus and Greece, with a focus on increasing access to island destinations. The event also brought together stakeholders from the Deputy Ministry of Tourism, Hermes Airports, tour operators, and ACTAA, reflecting coordination across different parts of the tourism sector.