articles | 02 April 2020

Cyprus posts fiscal surplus of 0.9% of GDP in January-February

Cyprus posted a general government fiscal surplus of €212 million or 0.9% of GDP in the first two months of 2020, marking a reduction of 48% compared with the corresponding period of last year.

The general government’s fiscal results were mainly affected by the increased expenditure associated with the introduction of the General National Health System (GesY) which came into force as of 1st March 2019. The preliminary data concern the period before the measures implemented by the Cypriot authorities to prevent the spread of the coronavirus disease.

According to the Cyprus Statistical Service (Cystat), total expenditure for the period of January-February 2020 recorded an increase of €166.3 million (+15%) as compared to 2019 and reached €1,277.4 million (€1,111.1 m in January-February 2019).

Intermediate consumption increased by €91.2 million (+96.0%) to reach €186.2 million in comparison to €95.0 million in the period of January-February 2019. Payable interest also increased to reach €86.2 m in 2020 as compared to €50.1 million in the corresponding period of last year (€36.1 million or 72.1% increase).

Social benefits increased by €35.5 million (+8.6%) to reach €446.1 million (as compared to €410.6 in January-February 2019), Cystat added.

Wages of state employees (including imputed social contributions and pensions of civil servants) increased by €26.1 million (+6.6%) to reach €423.2 million (€397.1 m in January-February 2019), while subsidies increased by €0.6 million and to €6.4 million.

The capital account also recorded a decrease, with gross fixed capital formation declining by €1.3 million decrease to €19.4 million, as compared to €20.7 million invested in 2019 during the said period.

Other capital investment declined by €3.2 million to €7.5 million compared with €10.7 million in the respective period of 2019.

Furthermore, total revenue decreased by 2.1% (€32.2 million) to total €1,489.7 m during the period of January-February 2020 compared to €1,521.9 m in January-February 2019.

Property income dropped by €19.8 million to €12.7 million during the first two months of 2020, compared to €32.5 m received in the corresponding period of 2019.

Taxes on production and imports registered a €7.5 million decrease (-1.4%) as compared to 2019 and were limited to €512.3 million (€519.8 million in January-February 2019), of which net VAT revenue decreased marginally by 0,1%, which corresponds to €0.2 million, and recorded a slightly reduced revenue of €318.9 million (as opposed to €319.1 million in January-February 2019).

Revenue from taxes on income and wealth recorded a decrease of €4.5 million (-1,2%) declining to €371.2 million during the months of January and February 2020, compared to €375.7 million received during the corresponding months of 2019.

The negative deviation in some revenue categories is attributed to the collection of tax arrears in 2019.

Social contributions collected in 2020 exhibited increased by  €92.7 million to €437.3 million, compared with €344.6 m in January-February 2019.

Revenue from the sale of goods and services increased by €26.9 million(or 28.4%) to reach €121.7 million in 2020 as compared to €94.8 million that were collected in 2019.

Current transfers increased by €1.5 million (+5.5%) to reach €28.6 million during the months of January and February of 2020 as compared to €27.1 million received in 2019.

Source: In-Cyprus

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