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Cyprus fiscal deficit rises to 1.1% of GDP in the first quarter of 2021

05/05/2021 14:08

Cyprus government recorded an annual deficit of €251.7 mn (1.1% of GDP) in the first quarter of 2021 according to preliminary General Government fiscal results, which are prepared by the Statistical Service of Cyprus (CyStat). 

During the same period of 2020 the government recorded a surplus of €226.9 mn (1.1% of GDP).

Expenditure

During the period of January-March 2021, total expenditure increased by €372.8 mn (+19.4%) and amounted to €2,290.3 mn, compared to €1,917.5 mn in the corresponding period of 2020.

It is noted, that this increase in expenditure is due to the support measures taken to address the effects of the Covid-19 pandemic.

Specifically, social benefits increased by €77.1 mn (+ 10.3%) and amounted to €826.6 mn, compared to €749.5 mn in 2020. Compensation of employees (including imputed social contributions and pensions of civil servants) increased by €30.1 mn (4.6%) and amounted to €679.8 mn, compared to €649.7 mn in 2020.

Subsidies increased by €264.4 mn and amounted to €274.8 mn, compared to €10.4 mn in 2020. The increase in the specific category is mainly attributed to the support measures to enterprises due to the consequences of the Covid-19 pandemic. Current transfers increased by €10.9 mn (7.3%) and amounted to €159.5 mn, compared to €148.6 mn in 2020. Interest payable increased by €22.4 mn (42.4%) ) and amounted to €75.2 mn, compared to €52.8 mn in 2020.

The capital account decreased by €19.7 mn (14.5%) to €115.8 mn, from €135.5 mn in 2020. This decrease is mainly due to gross capital formation, which decreased by €34.0 mn (30.6%) to €77.3 mn, from €111.3 mn in 2020. On the contrary, other capital expenditure increased by €14.3 mn (59.3%) and amounted to €38.5 mn, compared to €24.2 mn in 2020. Intermediate consumption decreased by €12.5 mn (7.3%) to €158.6 mn, from €171.1 mn in 2020.

Revenue

During the period of January-March 2021, total revenue decreased by €105.8 mn (4.9%) to €2,038.6 mn, compared to €2,144.4 mn in the corresponding period 2020.

In detail, taxes on production and imports decreased by €49.1 mn (6.5%) to €702.7 mn, from €751.8 mn in 2020, of which net VAT revenue decreased by €38.7 mn (8.3%) to €427.2 mn, from €465.9 mn in 2020. Revenue from taxes on income and wealth decreased by €31.4 mn (6.1%) to € 480.4 mn, from €511.8 mn in 2020. Social contributions decreased by €24.5 mn (4.0%) to €592.0 mn, from €616.5 mn in 2020. Current transfers decreased by €3.2 mn (7.0%) to €42.8 mn, from €46.0 mn in 2020. Revenue from the sale of goods and services decreased by €18.1 mn (12.6%) to €125.3 mn, from €143.4 mn in 2020.

On the contrary, capital transfers increased by €15.6 mn (32.8%) and amounted to €63.2 mn, compared to €47.6 mn in 2020. Property income increased by €4.9 mn (17.8%) and amounted to €32.2 mn, from €27.3 mn in 2020.

Increased amounts in specific categories of expenditure and revenue are partly attributed to the full implementation of the National Health System as of 01.06.2020.