Cyprus Mail

Government fiscal gap on cash basis widens to €43.7m in H1, finance ministry says

The government generated a fiscal deficit of €43.7m on a cash basis in the first six months of the year, compared to a €31.2m deficit in the respective period last year, the finance ministry said.

The deterioration of public finances in January to June was due to less cash transferred to the general government’s coffers from other government bodies, including local authorities, and semi-public entities, which fell to €1.6m from €42.1m in the respective period last year, the finance ministry said in a statement on its website on Wednesday. Overall government revenue rose by €37m to €3bn and overall spending dropped by €24m to below €3.1bn.

Indirect and direct tax revenue rose in the first six months of the year by €45m and €11m to €851.7m and €1.2bn respectively compared to the same period last year. Social security contributions rose by €23m to €510.2m, offsetting a €30m drop in non-tax revenue to €417.3m, the ministry said.

The drop in government spending was mainly on reduced current transfers, pensions, non-allocated expenditure, and interest payments, which fell by €46m, €30m, €24m and €12m to €673.8m, €261.1m, €8m and €224m respectively. These offset increased social security payments, subsidies, and capital expenditure, which rose by €37m, €27m and €24m to €775.9m, €70.3m and €92.9m respectively.

The primary balance in the first six months of the year, which excludes interest payments, fell to a surplus of €180.3m from €202.5m surplus in January to June 2015, according to the statement.

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