Cyrpus posts fiscal deficit of €805 million due to Covid-19 impact

Cyprus posted a General Government deficit of €804.6 million, or 4.0% of GDP for the period of January – June 2020 with compared with a surplus of €240.5 million (1.1% of GDP), as public finances are adversely affected by the coronavirus pandemic.

 

According to preliminary data published by the Cyprus Statistical Service (Cystat), total expenditure for the fist six months ending in June, increased by 12,9% year on year amounting to €4.30 billion, compared to €3.81 bl in the respective period of last year.

 

This significant increase in expenditure is due to the support measures taken to address the effects of the covid-19 pandemic on employment, which amounted to €314.7 mn, Cystat added.

 

Intermediate consumption increased by €233.5 mn (+60.6%) and amounted to €618.8 mn, compared to €385.3 mn in 2019, while social benefits increased by €63.8 mn (+4.7%) and amounted to €1.41 bl, compared to €1.34 bl in 2019.

 

Compensation of employees (including imputed social contributions and pensions of civil servants) increased by €67.4 mn (+5.5%) and amounted to €1.28 bl, compared to €1.21 bl in 2019.

 

Subsidies increased by €285.4 mn and amounted to €307 mn, compared to €21.6 mn in 2019, with the increase attributed to the support measures to enterprises due to the consequences of the covid-19 pandemic.

 

Interest payable increased by €15.1 mn (+8.1%) and amounted to €201.6 mn, compared to €186.5 mn in 2019, Cystat added.

 

Current transfers increased by €53 mn (+20.3%) and amounted to €313.6 mn, compared to €260.6 mn in 2019.

 

The capital account decreased by €227.1 mn (-56.8%) and was limited to €173 mn compared to €400,0 mn in 2019, Cystat said, adding that the steep reduction is mainly due to other capital expenditure, which decreased by €275 mn (-91.2%) and limited to €26.6 mn from €301.6 mn in 2019.

 

On the contrary, gross capital formation increased by €47,9 mn (+48,7%) and amounted to €146,3 mn, compared to €98,4 mn in 2019.

 

According to Cystat, in the fist six months of 2020 total revenue decreased by €554 mn (-13,7%) to €3.50 bl, compared to €4.05 mn in the corresponding period 2019.

 

Taxes on production and imports declined by €250 mn (-15.3%) to €1.38 bl, compared to €1.63 bl in 2019, of which net VAT revenue decreased by €145,6 mn (-13.7%) to €915.4 mn, compared to €1.06 bl in 2019.

 

Revenue from taxes on income and wealth decreased by €38 mn (-4.7%) and limited to €762.2 mn, compared to €800 mn in 2019.

 

Social contributions decreased by €220.5 mn (-19.8%) and limited to €896 mn, compared to €1.12 bl in 2019.

 

Revenue from the sale of goods and services decreased by €0,2 mn (-0.1%) and limited to €297.4 mn, compared to €297.6 mn in 2019.

 

The remaining revenue categories increased during the period of January-June 2020, Cystat added.

 

Current transfers increased by €14.1 mn (+16.5%) and amounted to €99.4 mn, compared to €85.3 mn in 2019.

 

Capital transfers increased marginally by 0.2% and amounted to €57.1 mn, compared to €57.0 mn in 2019.

 

For June the General Government’s fiscal deficit amounted to €245 million compared with €451 ml in the previous month.

 

Total expenditure in June increased by €165 mn (+24.5%) amounting to €839.4 mn from €674.4 mn in June 2019.

 

Total revenue decreased by 16.7%) to €594.4 mn from €713.6 mn in June 2019.

 

Source: Cyprus News Agency

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