Filenews 1 June 2024
The surplus in the state balance was almost double in the period January-April 2024, compared to last year, and is attributed to faster revenue growth than expenditure, which allows the Government to be more flexible in its social policy.
The preliminary fiscal results prepared by the Statistical Service for the period January-April 2024 show a general government surplus of €665.2 million (2.1% of GDP), compared to a surplus of €391 million. (1.3% of GDP) for the period January-April 2023. The primary surplus amounts to €807.8 million, from a surplus of €496 million. in the four months of 2023 and arises when revenues exceed expenses, not counting debt service.
The data of the Statistical Service were announced shortly before the end of the support measures against high prices that will be in force until the end of June (zero VAT on some products and electricity subsidy) and the surplus that exists in the funds gives the fiscal discretion to the Ministry of Finance to evaluate the data and extend or vary the measures.
Two days ago, Government Spokesman Konstantinos Letympiotis, on the occasion of the positive remarks from the International Monetary Fund and in view of the fact that the support measures against high prices will expire in a month, had said that the Government, according to fiscal data, will evaluate any additional or differentiated measures that have already been taken.
According to the data announced by the Statistical Service, total revenues, during the period January-April 2024, increased by €650.3 million. (+17.3%) and amounted to €4.415.1 million, compared to €3.764.8 million. in the corresponding period of 2023. Total expenses during the period January-April 2024 increased by €376.2 million. (+11.1%) and amounted to €3,749.9m. compared to €3.373,8 mn. in the corresponding period of 2023.
The recent report published by the IMF (Fiscal Monitor) states that it expects Cyprus to have a larger fiscal and primary surplus in 2024 compared to October 2023 estimates, while public debt is projected to be at lower levels. The IMF estimates a surplus of 2.9% is expected in 2023 from 1.9% previously expected and in 2024 it will reach 2.5% from 1.7% estimated in October.
In the stability programme submitted by Cyprus to the EU, it is stated that as a percentage of GDP, the general government fiscal balance is projected to decrease by around 0.3 percentage points compared to 2023 and reach 2.9%, while the primary balance is estimated to stand at 4.3% of GDP compared to 4.5% last year. In 2025, the fiscal position is projected to remain positive with the budget balance at 3.8% of GDP and declining slightly over the period 2026-2027 to around 2.4% of GDP, on average.
