Strong revenue growth boosts Cyprus public finances

Cyprus’ public finances remained healthy in 2025, with the state recording a budget surplus of €1.24 billion, according to preliminary fiscal results released on Wednesday by the Cyprus Statistical Service (Cystat).

The results, which were audited and verified under the Excessive Deficit Procedure framework of the European Commission, showed that the surplus corresponds to 3.4 per cent of GDP, while public debt stood at €20.08bn, equivalent to 55 per cent of GDP.

The statistical service also reported that total government revenue in 2025 increased by €1.17bn, or 7.9 per cent, reaching €15.92bn compared with €14.75bn in 2024.

Revenue from taxes on production and imports rose by €62.0 million, or 1.3 per cent, to €4.74bn, although net VAT revenue declined by €16.0 million, or 0.5 per cent, to €3.15bn.

At the same time, social contributions increased significantly by €385.4m, or 8.5 per cent, reaching €4.91bn.

Revenue from taxes on income and wealth also recorded strong growth, rising by €379.1m, or 10.0 per cent, to €4.18bn.

Other current transfers rose by €89.9m, or 22.9 per cent, amounting to €483.1m.

Revenue from the sale of goods and services increased by €182.3m, or 20.5 per cent, reaching €1.07bn.

In addition, capital transfers rose by €35.7m, or 10.6 per cent, to €372.6m, while property income receivable increased by €37.0m, or 30.1 per cent, to €159.9m.

On the spending side of the report, the service reported that total government expenditure in 2025 rose by €1.37bn, or 10.3 per cent, reaching €14.68bn, compared with €13.31bn in 2024.

Spending on compensation of employees, including social contributions and pensions of civil servants, increased by €282.8m, or 7.3 per cent, to €4.16bn.

Social transfers rose by €355.7m, or 6.7 per cent, reaching €5.66bn, the service added.

Intermediate consumption increased by €110.0m, or 7.5 per cent, to €1.59bn, while other current expenditure rose by €118.1m, or 14.0 per cent, to €960.5m.

A notable increase was recorded in capital expenditure, which rose by €544.1m, or 45.1 per cent, reaching €1.75bn.

This included €1.20bn in gross capital formation and €548.6m in other capital expenditure.

By contrast, property income payable declined by €17.2m, or 4.0 per cent, to €417.6m.

Subsidies also fell by €24.6m, corresponding to a drop of 14.4 per cent, reaching €146.8m.

The service concluded by saying that the data covers the full sequence of accounts for the general government sector, with revenue and expenditure analysed by category and classified into current and capital components.