Cyprus posts fiscal surplus of 0.9% of GDP in January – February 2020

Cyprus posted a general government fiscal surplus of €212 million or 0.9% of GDP in the first two months of 2020, marking a reduction of 48% compared with the corresponding period of last year.

The general government’s fiscal results were mainly affected by the increased expenditure associated with the introduction of the General National Health System (GesY) which came into force as of 1st March 2019. The preliminary data concern the period before the measures implemented by the Cypriot authorities to prevent the spread of the coronavirus disease.

According to the Cyprus Statistical Service (Cystat), total expenditure for the period of January-February 2020 recorded an increase of €166.3 mn (+15,0%) as compared to 2019 and reached €1,277.4 mn (€1,111.1 mn in January-February 2019).

Intermediate consumption increased by €91.2 mn (+96.0%) to reach €186.2 mn in comparison to €95.0 mn in the period of January-February 2019. Payable interest also increased to reach €86.2 mn in 2020 as compared to €50.1 mn in the corresponding period of last year (€36.1 mn or 72,1% increase).

Social benefits increased by €35.5 mn (+8.6%) to reach €446.1 mn (as compared to €410.6 in January-February 2019), Cystat added.

Wages of state employees (including imputed social contributions and pensions of civil servants) increased by €26.1 mn (+6.6%) to reach €423.2 mn (€397.1 mn in January-February 2019), while subsidies increased by €0.6 mn and to €6.4 mn.

The capital account also recorded a decrease, with gross fixed capital formation declining by €1.3 mn decrease to €19.4 mn, as compared to €20,7mn invested in 2019 during the said period.

Other capital investment declined by €3.2 mn to €7.5 mncompred with €10.7 mn in the respective period of 2019.

Furthermore, total revenue decreased by 2.1% (€32.2 mn) to total €1,489.7 mn during the period of January-February 2020 compared to €1,521.9 mn in January-February 2019.

Property income dropped by €19.8 mn to €12.7 mn during the first two months of 2020, compared to €32.5 mn received in the corresponding period of 2019.

Taxes on production and imports registered a €7.5 mn decrease (-1,4%) as compared to 2019 and were limited to €512.3 mn (€519.8 mn in January-February 2019), of which net VAT revenue decreased marginally by 0,1%, which corresponds to €0,2 mn, and recorded a slightly reduced revenue of €318.9 mn (as opposed to €319,1 mn in January-February 2019).

Revenue from taxes on income and wealth recorded a decrease of €4.5 mn (-1,2%) declining to €371.2 mn during the months of January and February 2020, compared to €375.7 mn received during the corresponding months of 2019.

The negative deviation in some revenue categories is attributed to the collection of tax arrears in 2019.

Social contributions collected in 2020 exhibited increased by €92.7 mn to €437.3 mn, compared with €344.6 mn in January-February 2019.

Revenue from the sale of goods and services increased by €26,9mn (or 28,4%) to reach €121,7 mn in 2020 as compared to €94,8 mn that were collected in 2019.

Current transfers increased by €1,5 mn (+5,5%) to reach €28,6 mn during the months of January and February of 2020 as compared to €27,1 mn received in 2019.

Source: Cyprus News Agency

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