Cyprus records fiscal deficit of €142.7 million in the second quarter of 2026

The Cyprus Statistical Service (Cystat) released preliminary data for the second quarter of 2026, showing a general government deficit of €142.7 million. This figure represents an increase from the €127.9 million deficit recorded during the same period in 2025. While the government saw revenue growth, expenditures rose at a faster pace, leading to the widened fiscal gap.

Total revenue for the April–June 2026 period reached €3.60 billion, a 2% increase of €69.1 million compared to the previous year. This growth was largely driven by a 6.9% rise in social contributions to €1.26 billion and an 8.3% increase in taxes on production and imports, which totaled €1.24 billion. Notably, net VAT revenue surged by 19% to reach €879.4 million. Conversely, total government expenditure grew by 2.3% to €3.74 billion, primarily due to higher social benefits and intermediate consumption.

The fiscal balance of the general government was recorded at -0.4% of GDP, compared to -0.3% the previous year. Analysts attribute this pressure to seasonal fluctuations, current loan obligations, and state measures intended to combat rising inflation and high costs of living.