fiscal surplus — The Cyprus government has reported a fiscal surplus of €593.4 million for the first four months of 2026, reflecting 1.5 per cent of the country’s GDP. This figure, released by the Cyprus Statistical Service (Cystat), indicates a slight decrease from the €614 million surplus recorded during the same period in 2025, which was 1.7 per cent of GDP.
Fiscal surplus: Revenue Growth Highlights
Total revenue for January to April reached €4.99 billion, marking an increase of €194.4 million or 4 per cent compared to €4.80 billion in 2025. Notably, income and wealth tax revenues rose by €121 million, or 10.3 per cent, amounting to €1.29 billion, up from €1.17 billion a year earlier.
Social Contributions and VAT Revenues Surge
Social contributions also showed significant growth, increasing by €128.9 million or 8.3 per cent to €1.69 billion, compared to €1.56 billion during the same period in 2025. Additionally, net VAT revenue rose by €53.5 million, or 5.4 per cent, leading to a total of €1.05 billion, up from €993.7 million in the previous year.
Mixed Results in Other Revenue Streams
While many revenue sources displayed positive trends, some areas faced declines. Property income fell by €23.6 million, or 27.8 per cent, totalling €61.2 million, down from €84.8 million in 2025. Similarly, revenue from the sale of goods and services decreased by €43.6 million, or 12 per cent, reaching €318.4 million compared to €362 million the previous year.
Expenditure Trends and Financial Dynamics
Total government expenditure rose by €215 million, or 5.1 per cent, reaching €4.4 billion in early 2026, compared to €4.19 billion in the same period last year. This increase is attributed to several factors including higher social benefits and interest payments.
Rising Social Benefits and Employee Compensation
Social benefits alone increased by €109.6 million, or 6.4 per cent, amounting to €1.82 billion, compared with €1.71 billion in 2025. Employee compensation, which includes pensions and social contributions for civil servants, also saw a rise of €24.5 million or 1.9 per cent, totalling €1.29 billion.
Interest Payments and Other Expenditures
Interest payments surged by €28.6 million, or 19.2 per cent, reaching €177.3 million compared to €148.7 million in the same period of 2025. In contrast, current transfers dropped by €39.4 million, or 31.2 per cent, totalling €87 million.
Capital Account and Investment Trends
The capital account experienced a slight decline, falling by €2.8 million to €320 million, while gross capital formation decreased by €8.9 million, or 3.5 per cent, reaching €244.3 million. Despite these declines, other capital expenditures rose by €6.1 million, amounting to €75.7 million.
Future Projections and Data Reporting Challenges
Cystat indicated that estimates for various government entities, particularly within the local government sector, were produced due to insufficient data submissions from relevant authorities. This could influence future financial reporting and projections, as the accuracy of data remains crucial for understanding fiscal health.
