The Cyprus government maintained a strong fiscal position through the first eight months of 2025, recording a surplus of nearly €1.4 billion, equivalent to 4.0% of GDP. This stable result was achieved even as both government revenue and expenditure saw significant increases of around 7%, according to preliminary data from the Statistical Service.
The Drivers of Increased Government Revenue
Total government revenue for the January-August period climbed by 6.8% compared to the previous year, reaching €10.1 billion.
The main factors contributing to this increase were:
- A major rise in social contributions, which grew by 8.4% (€243.8 million).
- Higher collections from taxes on income and wealth, which added an extra €178.3 million to state coffers.
- A 17.7% increase in revenue from the sale of goods and services.
A Parallel Rise in State Spending
During the same period, total state expenditure grew by 7.1% to €8.7 billion.
The biggest increase in spending was on social benefits, which rose by 6.8% (€231.1 million). The government payroll for compensation of employees also increased by 6.2% (€149.3 million).
Significantly, the government also boosted its investment in the capital account, with spending on gross capital formation and other capital projects rising by a combined 22.9%.
Source: Stockwatch.com.cy