Cyprus records €580.6m budget surplus in Q1 2025

Cyprus posted a budget surplus of €580.6 million in the first quarter of 2025, amounting to 1.6% of GDP, according to preliminary fiscal results released by CySTAT.

The figure marks a slight increase from the €575.7 million surplus, or 1.7% of GDP, recorded in the same period of 2024.

The increase in revenue was driven primarily by a surge in social contributions, which rose by €110.4 million or 10.5% to reach €1.162 billion. Income and wealth taxes also contributed significantly, increasing by €70.7 million or 7.7% to €985.9 million.

Revenue from the sale of goods and services jumped by €63.2 million, or 29.1%, to €280.5 million, while taxes on production and imports saw a smaller increase of €29.0 million or 2.7%, totalling €1.101 billion. Within that category, net VAT revenue showed only a marginal rise of €3.2 million (0.4%), reaching €731.6 million.

Conversely, several revenue streams recorded declines. Current transfers fell by €47.9 million, a 40.5% drop to €70.4 million, while capital transfers decreased sharply by €9.2 million or 78% to just €2.6 million. Revenue from property income also fell slightly by €1.7 million (8.1%) to €19.4 million.

On the expenditure side, total spending reached €3.042 billion in the first quarter, an increase of €209.5 million or 7.4% compared to the same period in 2024.

Spending on social benefits rose by €110.3 million or 9.4% to €1.288 billion. Compensation of employees, which includes salaries, pensions, and imputed social contributions for civil servants, increased by €57.1 million (6.4%) to €954.6 million. Interest payments were also slightly higher at €72.9 million, up €1.2 million or 1.7%.

Capital expenditure saw a notable increase of €59.5 million, a 38.2% jump to €215.4 million. Gross capital formation rose by €19.3 million or 13%, totalling €168.2 million, while other capital spending increased significantly—by €40.2 million to €47.2 million—compared to just €7 million in the first quarter of 2024.

Meanwhile, some expenditure categories recorded declines. Intermediate consumption dropped by €12.7 million (4.3%) to €282.4 million, current transfers fell by €3.9 million (2%) to €192.7 million, and subsidies declined by €2 million (5.2%) to €36.2 million.

(Source: CNA)