Cyprus recorded a general government surplus of €593.4 million, equivalent to 1.5% of GDP, in the first four months of 2026, according to preliminary fiscal results prepared by the Statistical Service. The figure is down from €614 million (1.7% of GDP) in the same period of 2025 and €650.5 million (1.9% of GDP) in the corresponding period of 2024, though it remains well above the €291.9 million and €296.6 million recorded in the same periods of 2023 and 2022 respectively.
The fiscal balance faces a series of ongoing pressures from both domestic and external sources that could push the surplus significantly lower than 2025 levels if conditions persist.
Tourism
Tourist arrivals fell 30.7% in March and 27.6% in April, reflecting the impact of regional instability in the Middle East. With tourism one of the main pillars of economic activity, a prolonged deterioration is expected to reduce tourism revenues and with them a significant source of state income.
Fuel prices
The conflict’s impact on oil prices pushed fuel costs higher, prompting the government to introduce a temporary fuel tax reduction at a cost of €18.6 million. However, higher fuel prices have also increased government revenues from that sector, partially mitigating the impact on the fiscal balance.
Foot-and-mouth disease
The foot-and-mouth crisis in the livestock sector has spread to more units with no signs of easing. The state faces significant compensation payments to livestock farmers, adding further pressure to the fiscal position.
Revenues
Income and wealth tax revenues rose by €121 million, or 10.3%, to €1,291.5 million, compared with €1,170.5 million in the same period of 2025. Social contributions increased by €128.9 million, or 8.3%, reaching €1,687.2 million against €1,558.3 million a year earlier. Taxes on production and imports totalled €1,533.4 million, up €42.5 million or 2.9%, with net VAT receipts — after refunds — rising €53.5 million or 5.4% to €1,047.2 million from €993.7 million in the first four months of 2025.
Interest and dividend receipts fell by €23.6 million, or 27.8%, to €61.2 million from €84.8 million the previous year. Revenue from services declined by €43.6 million, or 12%, to €318.4 million from €362 million in 2025.
Expenditure
Total expenditure rose by €215 million, or 5.1%, to €4,401.7 million in January-April 2026, compared with €4,186.7 million in the same period of 2025. Staff costs — including imputed social contributions and civil service pensions — increased by €24.5 million, or 1.9%, to €1,294.5 million. Social benefits rose by €109.6 million, or 6.4%, to €1,823.5 million from €1,713.9 million in the corresponding period last year.
Read more: