Insider Economy €73 m deficit in January – April 2020 as Covid-crisis takes toll

€73 m deficit in January – April 2020 as Covid-crisis takes toll

 

 

The Cyprus General Government generated a deficit of €73 million or 0.4% for the period of January – April 2020, reflecting the adverse consequences of the coronavirus outbreak and the lockdown measures to curb the spread of the disease.

According to preliminary data published by the Cyprus Statistical Service, total expenditure for the four months of 2020 rose by €117.1 mn or 4.7% compared to the corresponding period of 2019 and amounted to €2,606.5 mn

Social benefits increased by €46.2 mn or 5.6% to €869.7 mn from €823.5 mn in the corresponding period of last year.

Compensation of employees (including imputed social contributions and pensions of civil servants) increased by €45.4 mn or by an annual 5.7% to €848.1 mn (from €802,7 mn in the corresponding period of 2019).

Subsidies increased by €61.4 mn and amounted to €76.2 mn (from €14.8 mn in the corresponding period of 2019). The increase in the specific category is partly attributed to the support measures to enterprises due to the consequences of the covid-19 pandemic, Cystat said.

Current transfers increased by €32,8 mn or 17.7% and amounted to €218.1 mn from €185.3 mn for the period of January-April 2019.

Total revenue declined by 5.9% or €157.5 mn to €2,533.8 mn during the period of January-April 2020 from €2,691.3 mn during the corresponding period of 2019.

Taxes on production and imports decreased by €101,5 mn or -9.7% compared to 2019 and were reduced to €945.9 mn from €1,047.4 mn in 2019, of which net VAT revenue decreased by 6.6%, corresponding to €44.5 mn and was limited to €624.7 mn in 2020 (from €669.2 mn during the first four months of 2019).

Revenue from taxes on income and wealth recorded a decrease of €26.5 mn  or -4.4% and amounted to €573.5 mn in 2020, compared to €600 mn during the first four months of 2019.

Property income decreased by €42.2 mn or by -90% to to €4.7 mn, compared to €46.9 mn during the first four months of 2019.

In April total expenditure spiked by an annual 22.8% amounting to €688.1 mn compared with €560.2 mn in April 2019.

Among the main categories of expenditure, social benefits increased by €9.6 mn (+4.5%) and amounted to €222.7 mn, subsidies increased by €60.6 mn and amounted to €65.8 mn and current transfers increased by €31.4 mn (+98.1%) and amounted to €63.4 mn in April 2020.

Total revenue fell by an annual 35.1% or €244.1 mn to €451.2 mn from €695.3 mn in April 2019.

According to Cystat, among the main categories of revenue, taxes on production and imports fell by 32.2% (reduced to €195.3 mn from €287.9 ​​mn in 2019), net VAT revenue decreased by 16.5% (reduced to €155.5 mn from €186.3 mn in 2019), revenue from taxes on income and wealth recorded a decrease in the order of 31.0% (reduced to €72.7 mn compared to €105.3 mn in 2019) and social contributions decreased by 40.3% (reduced to €121.9 mn from €204.1 mn in 2019).

The increase in expenditure and the decrease in revenue for the month of April 2020 are mainly due to the measures taken to support enterprises and the suspension of various sectors of the economy, respectively, as a result of the Covid-19 pandemic.

(CNA)

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