Cyprus budget surplus declines in first quarter of 2026 amid rising spending

In the first quarter of 2026, the Cyprus government's budget surplus decreased by €27 million, amounting to €573.3 million (1.5% of GDP) compared to €600.6 million (1.6% of GDP) a year earlier. The main reason was a faster increase in government spending relative to revenue, despite overall economic growth.

According to the Statistical Service, total expenditure for January–March rose by €221.3 million (+7.3%) to reach €3.2 billion. The largest increases were recorded in social benefits (+€82.3 million), interest payments on public debt (+41.1%), and current transfers (+31.6%). Expenditure on public servant salaries and intermediate consumption also increased. Only subsidies showed a decline.

Government revenue for the same period grew by €194 million (+5.4%) to €3.8 billion. The main contribution came from taxes on income and property (+10.9%) and social contributions (+7.3%). Revenue from indirect taxes on production and imports also increased. Meanwhile, income from services, interest, and dividends, as well as current transfers, decreased.

It was separately noted that for a number of government subsectors, including local government, data were estimated due to incomplete reporting.