Cyprus budget surplus shrinks to €593 million amid rising public spending

Cyprus’s financial indicators remain positive, but the state budget surplus for the first four months of 2026 came in below last year’s level. According to preliminary data from the Statistical Service, from January to April the surplus of the general government sector amounted to 593.4 million euros, or 1.5% of GDP. In the same period of 2025, the figure stood at 614 million euros, corresponding to 1.7% of GDP.

Despite a decline in the surplus by 21 million euros, government revenue continued to grow. Over the four-month period, it rose by 4% to 5 billion euros. The main source of growth was revenue from income and property taxes, which increased by 10.3% to 1.3 billion euros. Social contributions rose by 8.3% to 1.7 billion euros, while VAT revenue increased by 5.4% to around 1 billion euros.

At the same time, income from interest and dividends fell by almost 28%, declining to 61.2 million euros.

Government spending grew faster than revenue. Over the reporting period, it increased by 5.1% to 4.4 billion euros. The most notable rise was recorded in social benefits, which increased by 109.6 million euros, or 6.4%, to 1.8 billion euros.

Spending on public sector wages also increased, reaching 1.3 billion euros, as did payments for servicing the public debt. The latter rose by 19.2% to 177.3 million euros.

The Statistical Service clarified that some of the data, in particular for the local government sector, is based on estimates due to the lack of complete reporting from some authorities.

Despite a slight reduction in the surplus, Cyprus continues to maintain a positive balance in public finances, indicating a stable budget position amid rising social and administrative costs.