Cyprus government records €142.7m deficit in second quarter

Cyprus’ general government recorded a deficit of €142.70 million in the second quarter of 2026, up from €127.90 million in the same period last year, as public spending grew faster than revenue, according to preliminary figures released by the Cyprus Statistical Service (Cystat). Total revenue rose by €69.10 million, or 2 per cent, to €3.60 billion between April and June, compared with €3.53 billion in the second quarter of 2025. However, total expenditure increased by €84.00 million, or 2.3 per cent, to €3.74 billion, from €3.66 billion a year earlier. The figures show that higher income from social contributions and taxes on production and imports, particularly value added tax (VAT), was partly offset by declines in several other revenue categories. Social contributions increased by €81.10 million, or 6.9 per cent, to €1.26 billion, compared with €1.18 billion in the corresponding quarter of 2025. Revenue from taxes on production and imports rose by €94.80 million, or 8.3 per cent, to €1.24 billion, from €1.15 billion a year earlier. Within this category, net VAT revenue increased by €140.50 million, or 19 per cent, reaching €879.40 million, compared with €738.90 million in the second quarter of 2025. In contrast, revenue from taxes on income and wealth fell by €7.70 million, or 1.3 per cent, to €600.90 million, from €608.60 million. Capital transfers declined by €31.10 million, or 26.2 per cent, to €87.60 million, compared with €118.70 million a year earlier. Other current transfers fell by €32.20 million to €108.50 million, from €140.80 million in the second quarter of 2025. Revenue from the sale of goods and services decreased by €12.20 million, or 4.8 per cent, to €242.50 million, compared with €254.70 million in the corresponding period last year. Property income received by the government also fell, dropping by €23.60 million, or 28 per cent, to €60.70 million, from €84.30 million. On the expenditure side, social transfers accounted for the largest category of spending, rising by €77.20 million, or 5.3 per cent, to €1.54 billion, compared with €1.46 billion a year earlier. Compensation of employees, including imputed social contributions and civil servants’ pensions, increased by €39.00 million, or 4 per cent, to €1.00 billion, from €965.90 million in the second quarter of 2025. Intermediate consumption, covering goods and services used by the government in its operations, rose by €72.90 million, or 20.2 per cent, to €434.60 million, compared with €361.70 million a year earlier. Property income payable increased by €12.00 million, or 6.9 per cent, to €184.90 million, from €172.90 million. The government’s capital account expenditure moved in the opposite direction, falling by €99.40 million, or 24.2 per cent, to €310.90 million, compared with €410.30 million in the second quarter of 2025. The latest figure comprised €261.30 million in capital formation and €49.60 million in capital transfers. In the corresponding quarter last year, capital account expenditure consisted of €263.40 million in capital formation and €146.90 million in capital transfers. Subsidies decreased by €9.10 million, or 28.1 per cent, to €23.30 million, from €32.40 million in the second quarter of 2025. Other current expenditure fell by €8.60 million, or 3.4 per cent, to €244.20 million, compared with €252.90 million a year earlier. The preliminary figures cover the general government sector for April to June 2026 and compare its revenue and expenditure with the same three-month period in 2025.