Cyprus’ public finances showed an improved picture in the fourth quarter of 2025, with the General Government surplus widening to €119.4 million, mainly driven by strong growth in tax revenues.
According to the latest preliminary data from CySTAT, the General Government recorded a higher fiscal surplus in the fourth quarter of 2025, rising to €119.4 million from €94.9 million in the corresponding period of 2024.
The improvement is largely attributed to a sharp increase in revenues, which rose by 11.5% or €482.4 million to reach €4.69 billion. A key driver was the 18% increase in taxes on income and wealth, which climbed to €1.29 billion, alongside a 6.2% rise in social contributions to €1.36 billion. Revenues from the provision of services also made a significant contribution, posting a 28.7% increase, while current transfers more than doubled.
By contrast, property income declined by 37.2%, while a slight decrease was also recorded in capital transfers.
On the expenditure side, spending also rose significantly by 11.1%, reaching €4.57 billion. Social benefits increased by 6.6% to €1.59 billion, while compensation of employees rose by 9% to €1.29 billion. Particularly strong increases were recorded in other current expenditure (+42.8%) and subsidies (+23.9%).
At the same time, capital expenditure grew by 20.9%, reflecting higher investment and capital transfers.
At the subsector level, Central Government remained in deficit, albeit improved at €-278.4 million, while Local Government moved into surplus at €37.1 million. Social Security Funds continued to post a strong surplus of €360.7 million, although reduced compared to last year.
Despite the increase in absolute terms, the surplus remained at 0.3% of GDP, indicating that fiscal expansion moved broadly in line with economic activity.
(Source: CNA)
