The Cyprus general government recorded a fiscal surplus of €573.3 million during the first quarter of 2026, highlighting its ongoing financial stability.
- The Cyprus general government recorded a fiscal surplus of €573.3 million during the first quarter of 2026, highlighting its ongoing financial stability.
- This surplus corresponds to 1.5 per cent of the country's GDP, a slight decrease from the surplus of €600.6 million, or 1.6 per cent of GDP, observed during the same period in 2025.
- Total revenue for the first three months of 2026 reached €3.81 billion, reflecting an increase of €194 million or 5.4 per cent compared to €3.61 billion in the first quarter of 2025.
- Social contributions also experienced a notable increase, rising by €86 million or 7.3 per cent to reach €1.26 billion, up from €1.18 billion in the corresponding quarter of the previous year.
- Taxes on production and imports increased by €31.5 million, or 2.9 per cent, totalling €1.12 billion as opposed to €1.09 billion in 2025.
Strong Performance Compared to Last Year
This surplus corresponds to 1.5 per cent of the country’s GDP, a slight decrease from the surplus of €600.6 million, or 1.6 per cent of GDP, observed during the same period in 2025.
Revenue Growth Drives Fiscal Surplus
Total revenue for the first three months of 2026 reached €3.81 billion, reflecting an increase of €194 million or 5.4 per cent compared to €3.61 billion in the first quarter of 2025.
Tax Contributions Rise Significantly
Revenue garnered from taxes on income and wealth rose by €107.8 million, equating to a 10.9 per cent increase, totalling €1.09 billion when compared to €985.9 million in 2025. This growth in tax revenue indicates a strengthened income base for the government.
Social Contributions Surge
Social contributions also experienced a notable increase, rising by €86 million or 7.3 per cent to reach €1.26 billion, up from €1.18 billion in the corresponding quarter of the previous year.
Stable Growth in Production Taxes
Taxes on production and imports increased by €31.5 million, or 2.9 per cent, totalling €1.12 billion as opposed to €1.09 billion in 2025.
VAT Revenue Shows Healthy Increase
The report revealed that net VAT revenue rose by €34.6 million, or 4.8 per cent, reaching €758.8 million compared to €724.2 million in the same period last year.
Minor Changes in Other Revenue Streams
Capital transfers saw a small increase of €0.6 million, or 13.6 per cent, reaching €5 million from €4.4 million in 2025. However, property income fell by €3.3 million, or 17.5 per cent, to €15.6 million from €18.9 million a year earlier. Revenue from the sale of goods and services decreased by €19 million, or 7.2 per cent, totalling €243.8 million compared to €262.8 million in 2025. Current transfers also declined by €9.6 million, or 14.0 per cent, amounting to €58.8 million from €68.4 million previously.
Expenditure Increases Amid Surplus
Total expenditure for the first quarter of 2026 rose by €221.3 million, or 7.3 per cent, reaching €3.23 billion, compared to €3.01 billion in the same period of 2025.
Rising Costs in Key Areas
Intermediate consumption rose by €25.6 million, or 9.2 per cent, totalling €303.7 million, up from €278.1 million in 2025. Compensation of employees increased by €23 million, or 2.4 per cent, amounting to €974.8 million compared with €971.8 million last year.
Social Benefits on the Rise
Social benefits also saw an increase of €82.3 million, or 6.4 per cent, reaching €1.36 billion, up from €1.28 billion in 2025, reflecting the government’s commitment to social welfare.
Significant Spike in Interest Payments
Interest payments experienced a sharp rise of €29.9 million, or 41.1 per cent, increasing to €102.7 million compared to €72.8 million in the same quarter a year ago, signalling growing financial obligations.
Current Transfers Show Significant Increase
Current transfers rose significantly by €58.8 million, or 31.6 per cent, totalling €245 million, up from €186.2 million a year earlier.
Capital Account and Investment Trends
The capital account recorded an increase of €5.6 million, or 2.5 per cent, totalling €229.1 million compared to €223.5 million in 2025. Additionally, gross capital formation rose by €7.4 million, or 4.4 per cent, reaching €176.6 million from €169.2 million last year. However, other capital expenditure saw a decline of €1.8 million, or 3.3 per cent, totalling €52.5 million compared to €54.3 million in 2025, whilst subsidies decreased by €3.9 million, or 19.5 per cent, amounting to €16.1 million compared to €20 million in the same timeframe last year.
