Insider Economy General Government fiscal results indicate a deficit of €799 million

General Government fiscal results indicate a deficit of €799 million

General Government fiscal results recorded a deficit of €799.2 million for the first 11 months of 2020, mainly due to the support measures taken to address the effects of the Covid-19 pandemic.

According a press release issued on Friday by the Statistical Service of the Republic of Cyprus, the preliminary General Government fiscal results indicate a deficit of €799.2 mn (3.8% of GDP) for the period of January-November 2020, as compared to a surplus of €566.3 mn (2.5% of GDP) that was recorded during the period of January-November 2019.

As regards the expenditure, during the period of January-November 2020, total expenditure increased by €785.3 mn (+10.5%) and amounted to €8,270.5 mn, compared to €7,485.2 mn in the corresponding period of 2019. It is noted, that this significant increase in expenditure is due to the support measures taken to address the effects of the Covid-19 pandemic on employment, which amounted to €530.3 mn.

Specifically, intermediate consumption increased by €359.2 mn (+37.3%) and amounted to €1,322.0 mn, compared to €962.8 mn in 2019. Social benefits increased by €116.3 mn (+4.7%) and amounted to €2,576.9 mn, compared to €2,460.6 mn in 2019.

Compensation of employees (including imputed social contributions and pensions of civil servants) increased by €109.5 mn (+4.7%) and amounted to €2,415.7 mn, compared to €2,306.2 mn in 2019. Subsidies increased by €498.6 mn and amounted to €538.4 mn, compared to €39.8 mn in 2019. The increase in the specific category is mainly attributed to the support measures to enterprises due to the consequences of the Covid-19 pandemic. Current transfers increased by €56.0 mn (+12.2%) and amounted to €514.0 mn, compared to €458.0 mn in 2019.

The capital account decreased by €306.4 mn (-39.2%) to €475.2 mn, from €781.6 mn in 2019. This decrease is mainly due to other capital expenditure, which decreased by €348.0 mn (-78.1%) to €97.4 mn, from €445.4 mn in 2019. On the contrary, gross capital formation increased by €41.6 mn (+12.4%) and amounted to €377.8 mn, compared to €336.2 mn in 2019. Interest payable decreased by €47.9 mn (-10.1%) to €428.3 mn, from €476.2 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.

Regarding the revenue, during the period of January-November 2020, total revenue decreased by €580.1 mn (-7.2%) to €7,471.4 mn, compared to €8,051.5 mn in the corresponding period 2019.

In detail, taxes on production and imports decreased by €258.2 mn (-8.4%) to €2,824.7 mn, from €3,082.9 mn in 2019, of which net VAT revenue decreased by €84.8 mn (-4.3%) to €1,880.1 mn, compared to €1,964.9 mn in 2019. Revenue from taxes on income and wealth decreased by €244.3 mn (-14.1%) to €1,491.2 mn, from €1,735.5 mn in 2019.

Property income decreased by €73.8 mn (-40.6%) to €107.9 mn, from €181.7 mn in 2019. Revenue from the sale of goods and services decreased by €35.5 mn (-5.2%) to €640.9 mn, from €676.4 mn in 2019. Current transfers decreased by €24.4 mn (-12.3%) to €173.5 mn, from €197.9 mn in 2019.

On the contrary, social contributions increased by €33.7 mn (+1.6%) and amounted to €2,143.8 mn, compared to €2,110.1 mn in 2019. Capital transfers increased by €22.4 mn (+33.4%) and amounted to €89.4 mn, compared to €67.0 mn in 2019.

(CNA)

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