fiscal surplus — Cyprus has reported a significant fiscal surplus of €840.6 million for the first seven months of 2025, reflecting 2.4 per cent of GDP, according to preliminary results from the Statistical Service of Cyprus (Cystat) released on Friday.
- This surplus, while impressive, is slightly lower than the €911.7 million surplus, or 2.7 per cent of GDP, recorded during the same period in 2024.
- In terms of revenue, Cyprus experienced a notable increase of €391.7 million, or 4.8 per cent, year-on-year, bringing total revenue to €8.50 billion compared to €8.10 billion in 2024.
- On the expenditure side, total spending rose by €462.8 million, or 6.4 per cent, reaching €7.65 billion, compared to €7.19 billion in the same period last year.
This surplus, while impressive, is slightly lower than the €911.7 million surplus, or 2.7 per cent of GDP, recorded during the same period in 2024.
Fiscal surplus: Revenue Growth in Various Sectors
In terms of revenue, Cyprus experienced a notable increase of €391.7 million, or 4.8 per cent, year-on-year, bringing total revenue to €8.50 billion compared to €8.10 billion in 2024.
Tax revenues played a crucial role in this growth, with income and wealth taxes climbing by 8.8 per cent to €2.03 billion, up from €1.87 billion the previous year. Additionally, social contributions surged by 9.2 per cent to €2.77 billion, compared to €2.54 billion in 2024.
Remarkably, property income almost doubled, rising to €113 million from €58.6 million a year earlier. Taxes on production and imports also saw an increase of 0.7 per cent, reaching €2.77 billion, while net VAT revenue edged up by 1.9 per cent to €1.84 billion.
Conversely, revenue from the sale of goods and services remained largely stable at €582.3 million. However, current transfers experienced a significant decline of 18.3 per cent, dropping to €196.4 million from €240.3 million in 2024. Capital transfers fell sharply by 54.2 per cent to €30.7 million, down from €67.1 million.
Increased Spending Across the Board
On the expenditure side, total spending rose by €462.8 million, or 6.4 per cent, reaching €7.65 billion, compared to €7.19 billion in the same period last year.
Key areas of spending included compensation of employees, which rose by 6.9 per cent to €2.24 billion. Social benefits also increased, climbing by 6.7 per cent to €3.20 billion. Intermediate consumption saw a rise of 7.1 per cent to €789.5 million, while interest payments rose slightly by 0.6 per cent to €283.5 million.
Capital expenditure saw substantial growth, expanding by 22.3 per cent to €601.2 million, compared to €491.7 million in 2024. This increase included gross capital formation of €491.8 million, marking a 20.1 per cent rise from €409.4 million the previous year, along with other capital spending of €109.4 million, which increased by 32.9 per cent from €82.3 million.
Shifts in Transfer Payments
Current transfers also saw a decline, dropping by 7.2 per cent to €453.5 million from €488.6 million in 2024. Subsidies decreased by 12.3 per cent, falling to €82.8 million from €94.4 million the previous year.
Surpluses Across Government Sectors
Breaking down the fiscal performance by government subsector reveals that the central government posted a surplus of €126.5 million, local government achieved a surplus of €8.9 million, and the social security funds recorded an impressive surplus of €705.2 million. This distribution of surpluses indicates a broadly positive fiscal landscape for Cyprus as it moves further into 2025.
