Cyprus Mail

State contribution to Gesy reduces fiscal surplus in 2019

The state’s contribution to the national health scheme Gesy was the main reason for the 33 per cent smaller fiscal surplus in 2019 compared to the previous year, the Financial Report of the Republic said.

The Financial Report, which records the government’s actual spending and revenue for the year, was submitted to the legislature last Friday and noted that the fiscal surplus fell from €634m in 2018 to €423m. Total revenue in 2019 was €6.6bn and total spending €6.2bn.

The reason for this, according to press release from the Treasury, was the “increased social spending” that rose from €933m in 2018 to €1.274bn. Part of the increased social spending was the €360m paid to Gesy by the state as the third contributing party.

Meanwhile, the state’s main source of revenue, direct and indirect taxation, which increased from €5.424bn in to 2018 to €5.525bn in 2019, made up 83.7% of total revenue. The main categories of expenditure were transfers at €2.578bn (local authorities, EU, SGOs Gesy, social benefits) and the bill for public sector wages, pensions and bonuses at €2.652bn.

In 2019 the state borrowed €3.2bn and paid off loans of a value of €3.5bn. The public debt was down from €21.3bn in 2018 to €21bn last year, but is still above 100% of GDP.

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