Cyprus Reduces Deficit to €39 Million in Q2 Amid Significant Revenue Gains

The government of Cyprus reported a considerably reduced deficit of €39 million in the second quarter of 2024, marking a substantial improvement from the €260.8 million deficit recorded in the same quarter of 2023.

This change, according to preliminary fiscal data from the Cyprus Statistical Service, was driven by substantial increases in both revenue and spending from April to June 2024.

In this period, total government revenue surged by €523.2 million, a 19.2 percent year-on-year increase, bringing total revenues to €3.25 billion, up from €2.72 billion last year. A major driver in this increase was the rise in taxes on production and imports, which grew by €173.6 million, or 17.4 percent, reaching €1.17 billion. Within this category, net VAT revenue alone saw a 20 percent boost, generating €789 million.

Revenues from social contributions also climbed, rising by €131.2 million or 13.5 percent, reaching €1.1 billion. Taxes on income and wealth recorded a similarly strong performance, bringing in €507.1 million—up 21.3 percent from €417.9 million in the prior year. Revenue from goods and services showed a significant 26.7 percent increase, totaling €227 million, while capital transfers experienced a moderate 4.5 percent rise to €56.1 million.

Meanwhile, property income surged by 62.2 percent to €44.6 million, and current transfers saw the most considerable increase at 75.8 percent, reaching €143.4 million.

On the expenditure side, total government spending in the second quarter of 2024 rose to €3.29 billion, reflecting an increase of €301.4 million, or 10.1 percent, compared to the same period last year. Spending on social benefits alone reached €1.4 billion, an 8.4 percent increase, while compensation for employees—including social contributions and pensions for civil servants—rose by 6.9 percent to €899.7 million.

Other current expenses grew sharply by 48 percent, amounting to €225.1 million, with intermediate consumption seeing a modest increase of 3.8 percent, totaling €310.2 million.

Payments for property income expanded by 38.8 percent to €172.9 million, and expenditure related to capital investments and transfers went up by 9.6 percent, totaling €250.6 million.

In contrast, government subsidies recorded a significant decline, dropping by 49 percent to €30.7 million, compared to €60.2 million in the previous year. 

By fLEXI tEAM