The government initially aimed at generating a fiscal surplus of 0.2% but revised the target last month to 0.9% against 0.4% in 2016.

It saw its revenue rise by €549m, to almost €4.7bn, in the first eight months of the year compared to the respective period last year, the finance ministry said in a statement on its website. Total expenditure rose by €105m to well under €4.3bn.

The increase in revenue in the first eight months was mainly due to an indirect tax revenue surge, which rose by €213m, to €1.9bn, including an increase of €157m in value added tax revenue, to €1.1bn, the ministry said. Direct tax revenue rose by €174m, to €1.4bn. Social insurance contributions rose by €74m, to €756.9m, while non-tax revenue rose by €80m, to 594.1m.

The rise in government spending in January to August mainly reflected a €68m increase in interest payments, to €394.5m, resulting from recent bond buybacks, the ministry said. It was followed by a €44m increase in wages and salaries, to €1.1bn, and by €39m in expenditure for goods and services, to €268.4m.

Spending on pensions rose by €12m, to €361.4m, and social insurance payments rose by €9m, to €1bn, it said. The rise in spending was partly offset by a €34m reduction in subsidies, a €17m drop in current transfers, and €12m in non-allocated expenditure.

The primary surplus, which is the difference between revenue and expenditure excluding the cost of servicing public debt, more than doubled, to €774.5m in January to August, from €336m the previous year, the finance ministry says.

Source: Cyprus Mail