Surplus amount equivalent to 4.2 per cent of Cyprus' GDP

Cyprus posted a historically high surplus of €1.42 billion between January and November 2024, equivalent to 4.2 per cent of GDP, according to preliminary data from the Cyprus Statistical Service (Cystat).

This marks a significant rise compared to the €709.9 million surplus (2.3 per cent of GDP) recorded during the same period in 2023.

The surplus was achieved alongside a 6.7 per cent increase in total revenues, which rose by €809.8 million to €12.84 billion compared to €12.04 billion in 2023.

Taxes on production and imports grew by €255 million (6.2 per cent) to €4.35 billion, with net VAT revenue increasing by 7.8 per cent to €2.98 billion.

Income and wealth taxes surged by 16 per cent, contributing €3.08 billion, while revenue from services rose by 21.6 per cent to €920.3 million.

What is more, social contributions grew by 2.4 per cent to €3.98 billion.

Despite the revenue growth, current and capital transfers saw notable declines.

Current transfers dropped by 29.1 per cent to €299.1 million, while capital transfers fell by 38.5 per cent to €78.2 million.

On the expenditure side, total spending increased at a slower pace of 0.9 per cent, rising by €98.9 million to €11.42 billion.

Key increases were seen in social benefits, which rose by 9.8 per cent to €4.68 billion, and personnel expenses, which grew by 7.7 per cent to €3.29 billion.

However, subsidies decreased by 5.9 per cent to €134.5 million, while current transfers dropped by 29.6 per cent to €747.6 million.

Capital account expenditures fell by 28.5 per cent to €939.4 million, with fixed capital investments rising slightly by 3.5 per cent to €781.8 million.

Cystat noted issues with incomplete data submissions, particularly from district self-governance organisations (Eoa), which hindered a comprehensive depiction of local government finances.

The lack of adherence to legal obligations for monthly budget implementation reporting, as required under the Fiscal Responsibility and Budget Framework Law, was highlighted as a significant challenge.

The statistical service also stated that it had been forced to rely on estimates due to insufficient information from local government entities.

It stressed that this practice would not continue in the future, calling for full compliance to ensure accurate and transparent reporting.

Finance Minister Makis Keravnos said in December that “through good fiscal management, Cyprus has high primary surpluses and is projected to continue on the same path in the coming years, which will lead to a significant reduction in public debt as a percentage of GDP”.

“This remarkable performance of the economy is also confirmed by the ratings and decisions of the credit rating agencies, as during this administration we have had a total of eight upgrades from all the credit rating agencies,” he added.