fiscal surplus — Cyprus has achieved a general government fiscal surplus of €1.39 billion, amounting to 4 per cent of GDP, for the period spanning January to August 2025, as reported by the state statistical service (Cystat) on Friday.
Fiscal surplus: Significant Increase in Government Revenue
The surplus reflects a slight improvement from the €1.33 billion surplus, also equivalent to 4 per cent of GDP, recorded in the same period in 2024. Total government revenue experienced a substantial rise, climbing by €641.10 million, or 6.80 per cent, to reach €10.10 billion, compared to €9.46 billion in the previous year.
Growth Across Various Revenue Streams
Revenue from taxes on income and wealth saw an increase of €178.30 million, or 7.10 per cent, bringing the total to €2.70 billion, up from €2.52 billion in 2024. Social contributions also showed notable growth, rising by €243.80 million, or 8.40 per cent, to a total of €3.14 billion, compared to €2.89 billion the previous year.
Property income nearly doubled, increasing by €57.40 million to €121.80 million, compared to €64.40 million in 2024. Taxes on production and imports edged up by €41 million, or 1.30 per cent, to €3.15 billion, while net VAT revenue rose by €47.70 million, or 2.30 per cent, to €2.12 billion.
Additionally, revenue from the sale of goods and services grew by €97.80 million, or 17.70 per cent, reaching €651.60 million compared to €553.80 million in 2024. Capital transfers received also recorded a sharp increase of €45.80 million, or 65.70 per cent, reaching €115.50 million, although current transfers declined by €22.90 million, or 9 per cent, to €232.70 million.
Increased Expenditure Across the Board
On the expenditure front, total spending rose by €574.30 million, or 7.10 per cent, amounting to €8.71 billion, up from €8.13 billion during the same period in 2024. Compensation of employees, which includes imputed social contributions and civil service pensions, increased by €149.30 million, or 6.20 per cent, reaching €2.54 billion.
Social benefits also saw a rise of €231.10 million, or 6.80 per cent, totalling €3.62 billion. Intermediate consumption, representing government operational expenses, grew by €84.60 million, or 10.10 per cent, reaching €920.10 million.
Capital Account and Investment Trends
Cyprus’ capital account rose significantly by €131.80 million, or 22.90 per cent, reaching €707 million. This increase reflects a boost in gross capital formation, which expanded by €92.90 million, or 19.20 per cent, to €576.70 million, alongside other capital expenditure, which jumped by €38.90 million, or 42.60 per cent, to €130.30 million.
Conversely, interest payments saw a slight decrease of €2.90 million, or 1 per cent, to €287.70 million. Current transfers decreased by €16.60 million, or 3.10 per cent, to €527 million, while subsidies were marginally lower by €3 million, or 3 per cent, totalling €98 million.
Fiscal Performance by Government Sectors
Cystat indicated that for several general government entities, particularly within the local government subsector, the figures are based on estimates due to incomplete data submissions by competent authorities. In terms of fiscal performance by sector, the central government surplus reached €622 million, up from €432.30 million in 2024.
The local government, however, registered a deficit of €32.70 million, a decline from a surplus of €14.60 million a year earlier. Notably, the surplus of the social security funds decreased to €806.40 million, down from €881.90 million in 2024.
Looking Ahead
The improvements in Cyprus’ fiscal position are indicative of stronger economic activity and effective revenue collection strategies. The government is likely to continue monitoring these trends closely to ensure sustainable fiscal health moving forward.
