Cyprus Government Surplus Climbs in First Quarter of 2024
In a recent announcement by the Cyprus Statistical Service (Cystat), the government’s financial health appears robust with a reported surplus of €523 million for the first quarter of 2024. This figure not only surpasses the surplus from the same period in the previous year, which was €376.4 million, but also represents a substantial 1.7 percent of the country’s Gross Domestic Product (GDP).
The increase in surplus is attributed to a significant rise in total revenue, which saw an 11.5 percent jump, amounting to €3.22 billion. A closer look at the revenue streams reveals noteworthy increments across various sectors. Notably, taxes on production and imports saw a modest rise, contributing an additional €21.5 million to the coffers.
One of the standout performers in revenue generation was the Internal Revenue Service, with IRS income tax and wealth taxes collectively surging by 17.4 percent, which translates to an impressive €135.7 million increase. This hike in IRS taxes is indicative of a potentially expanding tax base or improved tax collection mechanisms.
Social contributions, another vital source of government revenue, also experienced a healthy increase of 10.2 percent, amounting to nearly €90 million more than the previous year. The service sector demonstrated remarkable growth as well, with service revenue jumping by a striking 47.3 percent.
On the expenditure front, the government’s total outlay rose by 7.4 percent during the same period, reaching €2.7 billion. Employee compensation and social benefits accounted for significant portions of this increase, indicating continued investment in public services and welfare.
Despite the overall increase in spending, the capital account saw a decrease, primarily due to a reduction in gross fixed capital formation. However, it’s worth noting that interest payments on debt have decreased by 9.1 percent, suggesting a more manageable debt situation for the government.
The first quarter financial results for Cyprus paint a picture of a government that is not only managing its finances well but also witnessing growth in key areas such as tax revenue and service sector earnings. This fiscal performance sets a positive tone for the economic outlook of Cyprus in 2024.
