General government deficit grows in second quarter of 2026

According to preliminary data released by the Statistical Service of Cyprus, the general government recorded a fiscal deficit of €142.7 million during the second quarter of 2026. This represents an increase compared to the €127.9 million deficit observed in the same period of 2025. Analysts suggest that this deficit is seasonal, reflecting increased obligations related to debt servicing during this specific timeframe.

Despite the rising deficit, total government revenue increased by 2.0%, or €69.1 million, reaching €3.601 billion compared to €3.531 billion in the second quarter of 2025. This growth was driven by an 8.3% rise in taxes on production and imports, which totaled €1.242 billion, with net VAT receipts recording a significant 19.0% increase to €879.4 million. Additionally, social contributions rose by 6.9% to reach €1.258 billion. While revenue sources showed positive trends, the overall fiscal balance remained negative as government expenditures moved to higher levels during the quarter.