**Cyprus’ Fiscal Surplus Rises to €771 Million Through July**
Cyprus has reported a significant fiscal surplus of €770.6 million for the first seven months of 2026, representing 2 percent of the country's Gross Domestic Product (GDP). This figure, released by the statistical service Cystat, indicates an increase of €11 million compared to the €759.6 million surplus recorded during the same period in 2025. However, the surplus's share of GDP has slightly decreased from 2.1 percent in 2025.
Total government revenue for the period from January to July 2026 reached €8.91 billion, marking a 4.1 percent increase from €8.56 billion in the previous year. This growth in revenue is attributed to an additional €354.1 million collected compared to the first seven months of 2025.
A detailed breakdown of the revenue sources reveals that income and wealth taxes rose by 7.7 percent, contributing an additional €157.5 million for a total of €2.19 billion, up from €2.03 billion in 2025. Social contributions also saw an increase of 7.5 percent, adding €207.2 million to reach €2.98 billion, compared to €2.77 billion in the same period last year. Revenue from taxes on production and imports grew by 8.1 percent, amounting to €2.9 billion, up from €2.69 billion in 2025. Notably, net VAT revenue experienced a significant rise of 14.7 percent, climbing to €2.03 billion from €1.77 billion, an increase of €259.5 million.
Conversely, some revenue sources experienced declines. Capital transfers fell by €93.1 million to €19.6 million, down from €112.7 million in the first seven months of 2025. Revenue from the sale of goods and services decreased by 7.3 percent, dropping to €572.4 million from €617.5 million. Property income also saw a substantial decline of 29.4 percent, totaling €79.9 million compared to €113.2 million in the previous year. Additionally, current transfers decreased by 24.7 percent, falling to €172.8 million from €229.6 million.
On the expenditure side, total government spending rose by 4.4 percent to €8.14 billion, an increase from €7.8 billion in 2025. This rise in expenditure reflects an overall increase of €343.1 million. Intermediate consumption surged by 11.7 percent, reaching €873.3 million, up from €781.8 million. Compensation for employees, which includes imputed social contributions and civil servants' pensions, rose by 3.3 percent to €2.31 billion, an increase of €74.8 million from €2.24 billion. Social benefits also increased by 5.2 percent, adding €165.2 million to reach €3.36 billion, compared to €3.19 billion in the previous year. Interest payments rose by 5.6 percent to €298.8 million, up from €283 million.
Current transfers in government expenditure increased by 9.1 percent, rising to €549.4 million from €503.6 million. However, the capital account saw a decline of 5.6 percent, totaling €698.8 million, down from €740 million in the first seven months of 2025. Within this account, gross capital formation increased by 2.1 percent to €519.1 million, while other capital expenditures fell by 22.4 percent to €179.7 million. Subsidies also decreased by 13.7 percent to €55.6 million, down from €64.4 million.
The overall fiscal surplus was primarily driven by the performance of the Social Security Funds, which recorded a surplus of €775.1 million, an increase from €712 million in the previous year. In contrast, the central government reported a deficit of €5 million, a reversal from the surplus of €39.7 million recorded in the first seven months of 2025. The local government surplus also declined, falling to €0.5 million from €7.9 million.
These preliminary figures highlight the mixed financial performance of Cyprus in the early months of 2026, with robust revenue growth in certain sectors counterbalanced by declines in others, particularly in capital transfers and property income. The data underscores the ongoing fiscal dynamics as the government navigates economic challenges and seeks to maintain a balanced budget.