Cyprus state budget deficit rose by €80 million in 2023

Cyprus’ state budget deficit for 2023 increased by €80 million, compared to the deficit recorded in 2022, according to the state’s fiscal report submitted to the House of Representatives this week.

Specifically, the final state budget deficit for 2023 amounted to €980m compared to €900m in 2022.

Total revenues excluding inflows from loan receipts and repayments amounted to €8.72 billion for 2023, compared to €8.04 billion in 2022.

In addition, total expenditures excluding outflows for loan repayments and issuance amounted to €9.17bn in 2023, up from€8.20bn in 2022.

Therefore, for 2023, a state budget deficit before net flows, due to borrowing, of €0.45bn was incurred, up from €0.16bn in 2022.

Considering the inflows from loan receipts in 2023 amounting to €1.22bn (compared to €1.22bn in 2022) and outflows from loan repayments and issuance totalling €1.75bn in 2023 (compared to €1.96bn in 2022), the final state budget deficit for 2023 was €0.98bn (compared to €0.90bn in 2022).

The primary source of state revenues for 2023, excluding inflows from loan receipts and repayments, is taxation, totalling €7.33bn, constituting 84 per cent of revenues.

Additionally, tax revenue is divided into 47 per cent indirect taxes and 37 per cent direct taxes.

State expenditures primarily include staff wages, pensions, and gratuities (€3.20bn), social benefits (€1.80bn), and transfers (€1.36bn).

Social benefits encompass the government’s contribution to the General Healthcare System (Gesy), amounting to €0.70bn.

Transfers mainly comprise grants and contributions from the State to various organizations, including Public Law Organisations, Local Authorities, the European Union, international organisations, and individuals.

Total borrowing, excluding intragovernmental borrowing, amounted to €22.18bn as of December 31, 2023 (compared to €22.87bn in 2022).

The fiscal report was submitted to the Minister of Finance by the Auditor General of the Republic on March 8, 2024, and through a proposal by the Minister of Finance, it was approved by the Council of Ministers on March 19, 2024.

It includes a presentation of the revenues and expenditures included in the state budget for 2023, compared to the revenues received and expenditures made during the same fiscal year, taking into account supplementary budgets and any transfers of appropriations.

Finally, it should be noted that the fiscal report for the year 2023 was audited by the Auditor General of the Republic of Cyprus.