Insider Economy Cyprus posts €727 million deficit from January to October

Cyprus posts €727 million deficit from January to October

Cyprus posted a general government deficit amounting to €727 million for the period of January – October 2020, compared to a surplus of €639 million in the respective period of last year due to launch of government support measures and the reduced public revenue due to the coronavirus pandemic.

According to data published by the Statistical Service of Cyprus (Cystat), during the period of January-October 2020, total expenditure increased by €718.5 mn (+10,7%) and amounted to €7.448,0 mn, compared to €6.729,5 mn in the corresponding period of 2019.

The spike in public expenditure “is due to the support measures taken to address the effects of the Covid-19 pandemic on employment, which amounted to €506,2 mn,” Cystat added.

Intermediate consumption increased by €338,6 mn (+40,8%) and amounted to €1.169,0 mn, compared to €830,4 mn in 2019. Social benefits increased by €96,9 mn (+4,4%) and amounted to €2.318,8 mn, compared to €2.221,9 mn in 2019.

Compensation of employees (including imputed social contributions and pensions of civil servants) increased by €101,4 mn (+4,9%) and amounted to €2.182,8 mn, compared to €2.081,4 mn in 2019.

Subsidies showed the highest annual rise reaching by €472,7 mn and amounted to €509,0 mn, compared to €36,3 mn in 2019, with Cystat noting that the increase is associated with the support measures to enterprises due to the consequences of the Covid-19 pandemic.

Current transfers increased by €53,8 mn (+13,0%) and amounted to €466,7 mn, compared to €412,9 mn in 2019.

Revenue down by 8.8%

According to Cystat, public revenue for the period of January-October 2020, declined by €648,6 mn (-8,8%) to €6.720,2 mn, compared to €7.368,8 mn in the corresponding period 2019.

Taxes on production and imports decreased by €305,6 mn (-10,8%) to €2.511,5 mn, from €2.817,1 mn in 2019, of which net VAT revenue decreased by €139,0 mn (-7,7%) to €1.654,7 mn, compared to €1.793,7 mn in 2019.

Revenue from taxes on income and wealth decreased by €235,1 mn (-14,3%) to €1.412,3 mn, from €1.647,4 mn in 2019. Social contributions decreased by €36,1 mn (-1,9%) to €1.904,5 mn, from €1.940,6 mn in 2019.

Property income decreased by €72,1 mn (-45,0%) to €88,2 mn, from €160,3 mn in 2019. Revenue from the sale of goods and services decreased by €2,5 mn (-0,4%) to €562,0 mn, from €564,5 mn in 2019. Current transfers decreased by €6,7 mn (-3,9%) to €164,5 mn, from €171,2 mn in 2019.

Increased amounts in specific categories of expenditure are partly attributed to the implementation of the National Health System as of 01.03.2019, Cystat said.

(CNA)

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