The PDMO also said that the Finance Ministry revised its 2014 fiscal balance to a deficit of€43.5 million, or 0.2% of the economy, from an almost balanced budget estimation in February, compared to a €891 million deficit or 4.9% of gross domestic product in 2013.

The government generated a fiscal primary balance of €454.7 million or 2.6% of GDP last year compared to a primary deficit of €327 million or 1.8% in 2013, the PDMO said in a statement on its website today. The primary balance is the difference between overall revenue and overall expenditure, excluding the cost of debt servicing.

The Finance Ministry initially expected the fiscal 2014 fiscal deficit to narrow to 4.7% of the economy from 5.4% the year before. The ministry also expected a €210 million primary deficit for 2014 or 1.3% of the GDP, compared to 2% primary fiscal shortfall in 2013.

“Developments in public finances continue to exceed expectations,” the PDMO, which is a unit of the Finance Ministry, said. “The good fiscal results and the comfortable cash position of the government allows the PDMO to proceed with its target of reducing the outstanding stock of Treasury Bills from €700 million at the beginning of the year to €500 million by the end of 2015”.

In 2014, total revenue rose an annual 6.7% to almost €7.1 billion last year while public spending fell 5.4% to €7.1 billion, the PDMO said. The office said that the deterioration of the general government budget balance in the first two months of the year “is attributed to seasonal and temporary factors,” which it did not specify.

In January to February, the government posted a €4 million budget shortfall, compared to a €84 million surplus a year before which accounts for 0.5% of economic output, the PDMO said. The primary surplus of €180 million, or 1% of GDP, in the first two months of 2014 shrank to €74 million or 0.5% of GDP.

“Long term bond yields exhibited a significant decrease in the months of February and March as the market reacted to the quantitative easing decision by the European Central Bank and the better than expected results of the Cyprus economy in 2014,” the PDMO said. “Secondary market yields in the reference period dropped below 4% for the first time since 2011”.

Cyprus’s government debt rose to a preliminary €18.8 billion at the end of December 2014, compared to €18.4 billion a year before, the PDMO said.

Source: Cyprus Mail