General Government generates deficit 1.1% of GDP in January – April 2021

Cyprus General Government posted a deficit of €244.2 million or 1.1% of GDP for the period of January - April 2021, compared to a surplus of 0.2% of GDP in the respective period of 2020, as the government continued to support the economy amid the Covid-19 pandemic.

Public spending for January-April 2021, rose by €440.8 mn (+17,0%) to €3,038.3 mn, compared to €2,597.5 mn in the corresponding period of 2020, pushed upwards due to the support measures taken to address the effects of the Covid-19 pandemic, the Statistical Service said.

Social benefits increased by €116.1 mn (+11,7%) to €1,111.8 mn, compared to €995.7 mn in 2020, while compensation of employees, including imputed social contributions and pensions of civil servants, rose by €48.8 mn (+5,7%) to €911 mn, compared to €862.2 mn in 2020.

Subsidies increased by €265.1 mn amounting to €341.3 mn, compared to €76.2 mn in 2020. The increase in subsidies is associated with the support measures to enterprises due to the consequences of the Covid-19 pandemic.

Current transfers increased by €6.8 mn (+3,4%) to €207,6 mn, compared to €200,8 mn in 2020, while interest payable increased by €54,5 mn and amounted to €114,7 mn, compared to €60,2 mn in 2020, Cystat added.

The capital account decreased by €46.0 mn (-27,8%) to €119.7 mn, from €165.7 mn in 2020, pushed downwards due to gross capital formation, which decreased by €41.5 mn (-30,4%) to €95.2 mn, from €136.7 mn in 2020.

Public revenue for the period of January-April 2021, increased by €152.2 mn (+5,8%), amounting to €2,794,1 mn, compared to €2,641,9 mn in the corresponding period 2020.

Taxes on production and imports increased by €96.4 mn (+10,1%) and amounted to €1,049,7, compared to €953.3 mn in 2020, of which net VAT revenue increased by €57.2 mn (+9,2%) and reached €676,3 mn, compared to €619,1 mn in 2020.

Revenue from taxes on income and wealth increased by €15.5 mn (+2,6%) amounting to €601.9 mn, compared to €586.4 mn in 2020.

Social contributions rose by €55.1 mn (+7,1%) reaching €826.6 mn, compared to €771.5 mn in 2020.

According to Cystat, capital transfers increased by €14.3 mn (+26,5%) and amounted to €68.3 mn, compared to €54.0 mn in 2020, while property income increased by €4.3 mn (+12,1%) rising to €39.6 mn, compared to €35.3 mn in 2020.

Current transfers decreased by €6.9 mn (-11,8%) to €51.,2 mn, from €58,1 mn in 2020, while revenue from the sale of goods and services decreased by €26.5 mn (-14,4%) to €156,8 mn, from €183.3 mn in 2020.

Cystat said that increases in specific categories of expenditure and revenue are partly attributed to the full implementation of the National Health System as of 01.06.2020.