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General government deficit at 3.3% of GDP

03/11/2020 16:26

Cyprus GDP recorded a 3.3% deficit for the period of January-September 2020, according to the preliminary General Government fiscal results, announced Tuesday by the Statistical Service of Cyprus (CYSTAT). The results indicate a deficit of €695.7 mn for the period of January-September 2020, as compared to a surplus of €586.2 mn (2.6% of GDP) that was recorded during the period of January-September 2019.

During the period of January-September 2020, total expenditure increased by €595.5 mn (+9.9%) and amounted to €6,617.0 mn, compared to €6,021.5 mn in the corresponding period of 2019.

It is noted, that this significant increase in expenditure is due to the support measures taken to address the effects of the Covid-19 pandemic on employment, which amounted to €481.0 mn.

Specifically, intermediate consumption increased by €307.7 mn (+43.6%) and amounted to €1,013.8 mn, compared to €706.1 mn in 2019. Social benefits increased by €56.3 mn (+2.8%) and amounted to €2,035.3 mn, compared to €1,979.0 mn in 2019. Compensation of employees (including imputed social contributions and pensions of civil servants) increased by €91.1 mn (+4.9%) and amounted to €1,948.2 mn, compared to €1,857.1 mn in 2019. Subsidies increased by €449.9 mn and amounted to €481.7 mn, compared to €31.8 mn in 2019. 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 €27.5 mn (+7.2%) and amounted to €408.1 mn, compared to €380.6 mn in 2019.

The capital account decreased by €292.3 mn (-44.5%) to €364.1 mn, from €656.4 mn in 2019. This decrease is mainly due to other capital expenditure, which decreased by €332.7 mn (-82.0%) to €73.2 mn, from €405.9 mn in 2019. On the contrary, gross capital formation increased by €40.4 mn (+16.1%) and amounted to €290.9 mn, compared to €250.5 mn in 2019. Interest payable decreased by €44.7 mn (-10.9%) to €365.8 mn, from €410.5 mn in 2019.
 

During the period of January-September 2020, total revenue decreased by €686.4 mn (-10.4%) to €5,921.3 mn, compared to €6,607.7 mn in the corresponding period 2019.

In detail, taxes on production and imports decreased by €333.8 mn (-13.3%) to €2,181.0 mn, from €2,514.8 mn in 2019, of which net VAT revenue decreased by €177.8 mn (-11.1%) to €1,418.6 mn, compared to €1,596.4 mn in 2019. Revenue from taxes on income and wealth decreased by €265.8 mn (-17.0%) to €1,295.3 mn, from €1,561.1 mn in 2019. Social contributions decreased by €18.6 mn (-1.1%) to €1,691.4 mn, from €1,710.0 mn in 2019. Property income decreased by €42.8 mn (-32.8%) to €87.7 mn, from €130.5 mn in 2019. Revenue from the sale of goods and services decreased by €2.3 mn (-0.5%) to €474.1 mn, from €476.4 mn in 2019. Current transfers decreased by €25.5 mn (-17.2%) to €122.5 mn, from €148.0 mn in 2019.

On the contrary, capital transfers increased by €2.4 mn (+3.6%) and amounted to €69.3 mn, compared to €66.9 mn in 2019.

Increased amounts in specific categories of expenditure are partly attributed to the implementation of the National Health System as of 01.03.2019.