Cyprus records fiscal surplus of €593.4 million for early 2026

Cyprus recorded a general government surplus of €593.4 million, representing 1.5% of GDP, for the first four months of 2026. This figure marks a decline from the €614 million (1.7% of GDP) surplus observed during the same period in 2025. Total revenue rose by 4% to €4.99 billion, driven by increases in income and wealth tax receipts as well as social contributions, while total expenditure grew by 5.1% to €4.4 billion. The fiscal balance faces downward pressure from multiple sources, including a significant decline in tourism arrivals, which fell 30.7% in March and 27.6% in April due to regional instability. Additionally, the government spent €18.6 million on a temporary fuel tax reduction to combat rising energy costs, although higher fuel prices simultaneously increased state tax revenues. Outbreaks of foot-and-mouth disease among livestock have further strained the budget due to required compensation payments to farmers. Analysts warn that if these conditions persist, the fiscal surplus could decrease further compared to 2025 levels.