Cyprus Mail

Government generates fiscal deficit of €226m in 2015 on cash basis

By Stelios Orphanides

The government generated a fiscal deficit of €225.9m in January to December of 2015, on a cash basis, compared to a fiscal surplus of €71.9m in 2014, the finance ministry said.

The fiscal deterioration resulted from an increase in total government expenditure by €123m, to over €6.2bn, in 2015, accompanied by a drop of €98m in overall revenue, the ministry said in a statement on its website on Friday.

Spending mainly rose on a €155m increase in current transfers, reflecting the introduction of the guaranteed minimum income last year, and a €50m increase of non-allocated expenditure, the ministry said.

Social security payments, wages and salaries, and subsidies fell by €39m, €19m and €9m last year, the finance ministry said. The drop in revenue was mainly due to a €66m slump in direct taxes and €76m in non-tax revenue, partly offset by a rise in indirect tax revenue and social security contributions.

In 2015, the government generated a primary fiscal surplus of €317.7m compared to €538.2m in 2014, the finance ministry said. The primary balance does not take into account interest payments which rose by €77m last year to €543.6m.

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