General government surplus at 0.8% of GDP in Q1 2020

The General Government surplus grew to 0.8% of GDP for the first quarter of 2020, according the preliminary General Government fiscal results, which are prepared by the Statistical Service of Cyprus (CYSTAT).

The results indicate a surplus of €164.2 mn (0.8% of GDP) for the period of January-March 2020, as compared to a surplus of €66.8 mn that was recorded during the period of January-March 2019 (0.3% of GDP).

Total expenditure for the first quarter of 2020 decreased by €10.8 mn compared to the corresponding period of 2019 and amounted to €1,918.4 mn from €1,929.2 mn (-0.6%).

The capital account decreased during the period January-March 2020 and was limited to €96.4 mn compared to €334.5 million in the corresponding period of last year. This decrease for the first quarter of 2020 is mainly due to the decrease in the category of other capital expenditure, which amounted to €13.1 mn for 2020 compared to €295.9 mn in the corresponding period of 2019.

On the contrary, gross capital formation increased by €44.7 mn in the period January-March 2020 and amounted to €83.3 mn compared to €38.6 million in 2019.

The following categories of expenditure exhibited an increase in the first quarter of 2020.

Intermediate consumption increased by €138.5 mn (+92.4%) and amounted to €288.4 mn compared to €149.9 mn in 2019. Interest payable also increased to €80.1 mn in the first quarter of 2020 from €76.8 million in the corresponding period of last year (increase of €3.3 mn or 4.3%).

Social benefits increased by €36.6 mn (+6.0%) and amounted to €647.0 mn (from €610.4 mn in 2019).

Compensation of employees (including imputed social contributions and pensions of civil servants) increased by €46.7 mn (+7.9%) and amounted to €641.4 mn (from €594.7 mn in the corresponding period of 2019).

Subsidies increased by €0.8 million and amounted to €10.4 mn for the period January-March 2020 (+8.3%)

Current transfers increased by €1.4 mn (+0.9%) and amounted to €154.7 mn in the first quarter of 2020 (from €153.3 mn in the corresponding period of 2019).

Total revenue increased by 4.3% (€86.6 mn) and amounted to €2,082.6 mn during the period January-March 2020 (from €1,996.0 mn during the corresponding period of 2019).

Social contributions collected in the first quarter of 2020 increased by 10.4% (or €53.8 mn) and amounted to €571.7 mn (from €517.9 mn in 2019).

Revenue from the sale of goods and services increased by €37.1 mn (or 28.9%) and amounted to €165.6 mn in 2020 compared to €128.5 mn collected in 2019.

Revenue from taxes on income and wealth recorded an increase of €6,1 mn (+1.2%) and amounted to €500.8 mn in 2020, compared to €494.7 mn collected in the first quarter of 2019.

In contrast, the remaining revenue categories declined in the first quarter of 2020.

Taxes on production and imports decreased by €8.9 mn (-1.2%) compared to 2019 and were reduced to €750.6 mn (€759.5 mn in 2019), of which net VAT revenue decreased by 2.8%, corresponding to €13.7 mn and was limited to €469.2 mn in 2020 (from € 482.9 mn during the first quarter of 2019).

Property income decreased by €0.4 mn (-8,3%) and limited to €4.4 mn, compared to €4.8 mn collected in the first quarter of 2019.

Capital transfers collected by the State decreased by €1.0 mn and were limited to €45.4 mn in 2020 (as opposed to €46.4 mn collected during the period January-March 2019).

Finally, current transfers decreased marginally by €0.1 mn (-0.2%) for the first quarter of 2020 and were limited to €44.1 mn compared to €44.2 mn collected in the corresponding period of 2019.

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