The Republic of Cyprus achieved a General Government surplus of €653.6 million during the third quarter of 2025, according to preliminary fiscal results released by the Statistical Service on Thursday.
While the figures confirm the island’s continued fiscal stability, the surplus represents a notable decrease from the €871 million recorded during the same period in 2024. The narrowing gap is largely attributed to a significant 10.3% rise in total expenditure, which climbed to €3,445.3 million, outpacing a more modest 2.6% growth in state revenue.
The increase in spending was driven primarily by social benefits and a rising public sector wage bill. Social benefits rose by €97.8 million to reach €1,334.6 million, while personnel emoluments—including public employee pensions—increased by 5.6% to €955.6 million. Most significantly, the capital account saw an 84.2% surge, reaching €489.3 million, reflecting intensified state investment and capital transfers.
On the revenue side, total receipts for the July–September period reached €4,099 million. This growth was supported by a €62.5 million increase in social contributions and a resilient performance in tax collection. Income and wealth taxes contributed €1,299.3 million to the treasury, while VAT revenue saw a healthy 4.8% rise to reach €886.4 million. Despite the overall spending hike, the government successfully reduced its property income payable—effectively its debt servicing costs—by 25.7%.
Economists suggest that the shift in the fiscal balance reflects a broader government strategy to reinvest surpluses into capital projects and social safety nets. However, the €217.4 million year-on-year drop in the quarterly surplus serves as a reminder of the pressures facing the national budget. While subsidies were slashed by a quarter to €37.3 million, the substantial rise in capital investments suggests that the administration is prioritising long-term infrastructure over short-term relief measures.
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