Cyprus Mail
Business

Cyprus’ general government balance in Jan–Apr turns negative due to Covid-19

THE Cyprus General Government generated a deficit of €73 million or 0.4 per cent for the period January – April 2020, reflecting the adverse consequences of the coronavirus outbreak and the lockdown measures to curb the spread of the disease.

According to preliminary data published by the Cyprus Statistical Service, total expenditure for the four months of 2020 rose by €117.1m or 4.7 per cent compared to the corresponding period of 2019 and amounted to €2.60bn. Social benefits increased by €46.2m or 5.6 per cent to €869.7 m from €823.5m in the corresponding period of last year.

Compensation of employees (including imputed social contributions and pensions of civil servants) increased by €45.4m or by an annual 5.7 per cent to €848.1m (from €802.7m in the corresponding period of 2019).

Subsidies increased by €61.4m and amounted to €76.2m (from €14.8 m in the corresponding period of 2019). The increase in the specific category is partly attributed to the support measures to enterprises due to the consequences of the covid-19 pandemic, Cystat said.

Current transfers increased by €32.8m or 17.7 per cent and amounted to €218.1m from €185.3m for the period January-April 2019.

Total revenue declined by 5.9 per cent or €157.5m to €2.53bn during the period of January-April 2020 from €2.69bn during the corresponding period of 2019.

Taxes on production and imports decreased by €101.5m or -9.7 per cent compared to 2019 and were reduced to €945.9m from €1.047bn in 2019, of which net VAT revenue decreased by 6.6 per cent, corresponding to €44.5m and was limited to €624.7m in 2020 (from €669.2m during the first four months of 2019).

Revenue from taxes on income and wealth recorded a decrease of €26.5m  or -4.4per cent and amounted to €573.5m in 2020, compared to €600m during the first four months of 2019.

Property income decreased by €42.2m or by -90 per cent to €4.7m, compared to €46.9m during the first four months of 2019.

In April total expenditure spiked by an annual 22.8 per cent amounting to €688.1m compared with €560.2m in April 2019.

Among the main categories of expenditure, social benefits increased by €9.6m (+4.5 per cent) and amounted to €222.7 m, subsidies increased by €60.6 m and amounted to €65.8m and current transfers increased by €31.4m (+98.1 per cent ) and amounted to €63.4 m in April 2020.

According to Cystat, among the main categories of revenue, taxes on production and imports fell by 32.2 per cent (reduced to €195.3m from €287.9​​m in 2019), net VAT revenue decreased by 16.5 per cent (reduced to €155.5m from €186.3m in 2019), revenue from taxes on income and wealth recorded a decrease in the order of 31 per cent (reduced to €72.7m compared to €105.3m in 2019) and social contributions decreased by 40.3 per cent (reduced to €121.9m from €204.1m in 2019).



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