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Government’s deficit at 2.3% of GDP

07/10/2021 16:27

The preliminary General Government fiscal results, which are prepared by the Statistical Service of Cyprus (CyStat) indicate a deficit of €504.1 mn (2.3% of GDP) for the period of January-August 2021, as compared to a deficit of €625.1 mn (3.0% of GDP) that was recorded during the period of January-August 2020.

Expenditure

During the period of January-August 2021, total expenditure increased by €606.9 mn (+10.4%) and amounted to €6,463.1 mn, compared to €5,856.3 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 €306.5 mn (+ 14.4%) and amounted to €2,438.1 mn, compared to €2,131.6 mn in 2020.

Compensation of employees (including imputed social contributions and pensions of civil servants) increased by €96.1 mn (+5.5%) and amounted to €1,837.9 mn, compared to €1,741.8 mn in 2020. Subsidies increased by €74.9 mn (+ 16.5%) and amounted to €529.0 mn, compared to €454.1 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 €60.4 mn (+17.8%) and amounted to €400.6 mn, compared to €340.2 mn in 2020. Intermediate consumption increased by €68.5 mn (+13.4%) ) and amounted to €578.9 mn, compared to €510.4 mn in 2020.

The capital account increased by €2.3 mn (+0.7%) and amounted to €349.6 mn, compared to €347.3 mn in 2020. In detail, gross capital formation increased by €18.3 mn (+6.9%) and amounted to €281.9 mn, compared to €263.6 mn in 2020 and other capital expenditure decreased by €16.0 mn (-19.1%) to €67.7 mn, from €83.7 mn in 2020.

On the contrary, interest payable decreased by €1.8 mn (-0,5%) to €329.0 mn, from €330.8 mn in 2020.

Revenue

During the period of January-August 2021, total revenue increased by €727,9 mn (+13.9%) and amounted to €5,959.0 mn, compared to €5,231.2 mn in the corresponding period 2020.

In detail, taxes on production and imports increased by €306.4 mn (+17,0%) and amounted to €2,112.9, compared to €1,806.5 mn in 2020, of which net VAT revenue increased by €207, 5 mn (+18.6%) and amounted to €1,323.6 mn, compared to €1,116.1 mn in 2020. Revenue from taxes on income and wealth increased by €122.9 mn (+9.3%) and amounted to €1,448.3 mn, compared to €1,325.4 mn in 2020. Social contributions increased by €241.4 mn (+16.3%) and amounted to €1,720.9 mn, compared to €1,479.5 mn in 2020.

Capital transfers increased by €19.3 mn (+32.5%) and amounted to €78.4 mn, compared to €59.1 mn in 2020. Current transfers increased by €29.6 mn (+26.9%) and amounted to €139.9 mn, compared to €110.3 mn in 2020. Revenue from the sale of goods and services increased by €9.6 mn (+2.7%) and amounted to €368.1 mn, compared to €358.5 mn in 2020. Property income increased by €15.8 mn (+ 21.2%) and amounted to €90.5 mn, compared to €74.7 mn in 2020.