Cyprus recorded a general government budget surplus of €567.1 million in the first quarter of 2026, according to preliminary fiscal results published on Tuesday by the Statistical Service.
Total government revenue rose by 5.8% year-on-year to €3.82 billion during the January-March period, while expenditure increased by 8% to €3.25 billion.
As a result, the fiscal surplus narrowed from €600.6 million in the first quarter of 2025 to €567.1 million.
Tax-driven revenue growth
Total revenue increased by €207.7 million to €3.82 billion, mainly reflecting higher social contributions, income and wealth tax receipts, and taxes on production and imports.
Social contributions rose by €96.6 million, or 8.2%, to €1.28 billion.
Revenue from income and wealth taxes increased by €107.8 million, or 10.9%, to €1.09 billion.
Taxes on production and imports rose by €36.9 million, or 3.4%, to €1.13 billion. Net value added tax (VAT) receipts, after refunds, increased by €40.1 million, or 5.5%, to €764.3 million.
Capital transfers edged up by €0.6 million to €5 million.
However, revenue from the sale of goods and services fell by €19 million, or 7.2%, to €243.8 million. Property income declined by €5.9 million, or 31.2%, to €13 million, while current transfers decreased by €9.3 million to €59.1 million.
Social spending records largest increase
Total expenditure rose by €241.2 million to €3.25 billion, with the largest increase recorded in social benefits.
Social benefits climbed by €82.5 million, or 6.5%, to €1.36 billion.
Compensation of employees, including imputed social contributions and public sector pensions, increased by €23.1 million, or 2.4%, to €974.9 million.
Intermediate consumption rose by €25.8 million, or 9.3%, to €303.9 million.
Capital expenditure also recorded a significant increase, rising by €48.3 million, or 21.6%, to €271.8 million.
Subsidies, however, fell by €3.9 million, or 19.5%, to €16.1 million.
Local govt deficit
The central government recorded a surplus of €245.9 million in the first quarter of 2026, compared with €312.2 million a year earlier.
The social security funds posted a surplus of €333.4 million, up from €304.8 million in the corresponding period of 2025.
Local government recorded a deficit of €12.2 million, an improvement from the €16.4 million deficit reported in the first quarter of last year.
Source: CNA
