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General Government’s deficit rises to 2.3% of GDP

30/06/2021 17:05

The preliminary General Government fiscal results, which are prepared by the Statistical Service of Cyprus indicate a deficit of €512.2 mn (2.3% of GDP) for the period of January-May 2021, as compared to a deficit of €368.6 mn (1.8% of GDP) that was recorded during the period of January-May 2020.

The increase in the deficit is mainly due to to the support measures taken to address the effects of the Covid-19 pandemic.

Expenditure

During the period of January-May 2021, total expenditure increased by €467,3 mn (+13.5%) and amounted to €3,930.2 mn, compared to €3,462.9 mn in the corresponding period of 2020.
 
It is noted, that the increase in specific expenditure categories is due to the support measures taken to address the effects of the Covid-19 pandemic.

Specifically, social benefits increased by €161.3 mn (+12.7%) and amounted to €1,432.1 mn, compared to €1,270.8 mn in 2020. Compensation of employees (including imputed social contributions and pensions of civil servants) increased by €65.4 mn (+6.1%) and amounted to €1,139.9 mn, compared to €1,074.5 mn in 2020. Subsidies increased by €218.4 mn and amounted to €431.0 mn, compared to €212.6 mn in 2020. The increase in the specific category is mainly attributed to additional support measures to enterprises due to the continuance of the Covid-19 pandemic. Current transfers increased by €12.9 mn (+5.1%) and amounted to €265.6 mn, compared to €252.7 mn in 2020. Interest payable increased by €50.2 mn (+34.1%) and amounted to €197.5 mn, compared to €147.3 mn in 2020.

On the contrary, the capital account decreased by €34.4 mn (-17.9%) to €157.5 mn, from €191.9 mn in 2020. In detail, gross capital formation decreased by €29.0 mn (-18.3%) to €129.7 mn, from €158.7 mn in 2020 and other capital expenditure decreased by €5.4 mn (-16.2%) to €27.8 mn, from €33.2 mn in 2020. Intermediate consumption decreased by €6.6 mn (-2.1%) to €306.6 mn, from €313.2 mn in 2020.

Revenue

During the period January-May 2021, total revenue increased by € 323.7 mn (+ 10.5%) and amounted to € 3,418.0 mn, compared to € 3,094.3 mn in the corresponding period 2020. In detail, taxes on production and imports increased by € 160,6 mn (+ 14.5%) and amounted to € 1,270.3, compared to € 1,109.7 mn in 2020, of which net VAT revenue increased by € 111, 7 mn (+ 15.9%) and amounted to € 814.7 mn, compared to € 703.0 mn in 2020.
 
Revenue from taxes on income and wealth increased by € 34.9 mn (+ 5.2%) and amounted to € 702.6 mn, compared to € 667.7 mn in 2020. Social contributions increased by € 117.8 mn (+ 12.8%) and amounted to € 1,039.6 mn, compared to € 921.8 mn in 2020. Capital transfers increased by € 17.6 mn (+ 31.7%) and amounted to € 72.9 mn, compared to € 55.3 mn in 2020. Property income increased by € 3.9 mn (+9.0%) and amounted to € 47,5 mn, compared to € 43,6 mn in 2020. Current transfers increased by € 11,6 mn (+ 15.9%) and amounted to € 84,6 mn, compared to € 73.0 mn in 2020. On the contrary, revenue from the sale of goods and services decreased by € 22.7 mn (-10.2%) to € 200.5 mn, from € 223.2 mn in 2020.