The state budget deficit in Cyprus surged to €980 million in 2023, a significant increase from the previous year. This rise was driven by higher expenditures surpassing revenues, with total expenses hitting €9.17 billion against revenues of €8.72 billion.
What was Cyprus’ state budget deficit in 2023?
In 2023, Cyprus’ state budget deficit significantly increased to €980 million, a rise from the €900 million deficit in 2022. This escalation was due to increased expenditures outpacing revenues, with total expenditures reaching €9.17 billion against revenues of €8.72 billion.
Exploring the Increase in Deficit
The Cypriot economy faced a challenging period in 2023 as the state budget deficit rose by €80 million, a significant increase from the previous year. This was revealed in the state’s fiscal report, diligently prepared and submitted to the House of Representatives. The numbers are stark: the final state budget deficit for 2023 soared to €980 million, a notable jump from €900 million registered in 2022.
This escalation in deficit is a result of both increased expenditures and revenues, albeit the former outpacing the latter. Total revenues, which exclude inflows from loan receipts and repayments, climbed to €8.72 billion for the year, up from €8.04 billion in the prior year. On the flip side, total expenditures, also excluding outflows for loan repayments and issuance, leaped to €9.17 billion, a rise from the previous €8.20 billion.
A Closer Look at Revenues and Expenditures
Taxation remained the primary source of state revenue in 2023, excluding loan inflows and repayments, totaling €7.33 billion. This substantial figure represented 84 percent of all revenues, highlighting the government’s reliance on tax income. The tax revenue itself was divided almost evenly between indirect taxes, at 47 percent, and direct taxes, which made up 37 percent.
When dissecting state expenditures, a few key areas emerge as significant contributors to the financial outflow. These include staff wages, pensions, and gratuities, totaling €3.20 billion, social benefits at €1.80 billion, and transfers amounting to €1.36 billion. Social benefits include crucial government contributions to the General Healthcare System, known as Gesy, which amounted to €0.70 billion. Transfers predominantly reflect grants and contributions from the State to various organizations, encompassing Public Law Organisations, Local Authorities, the European Union, international organizations, and individuals.
Debt and Borrowing Dynamics
As of December 31, 2023, total borrowing, excluding intragovernmental borrowing, stood at €22.18 billion. This figure, while substantial, actually indicated a small reduction from €22.87 billion in 2022. The intricate balance between loan inflows, which remained stable at €1.22 billion just as in 2022, and loan repayments and issuance, which saw a slight decrease to €1.75 billion from €1.96 billion, ultimately influenced the final state budget deficit numbers.
Rigorous Auditing and Oversight
The integrity of the fiscal report is underscored by the thorough audit conducted by the Auditor General of the Republic of Cyprus. This audit ensures that the fiscal activities of the state are transparent and held to the highest standards of scrutiny. The report, encapsulating a detailed presentation of revenues and expenditures against the backdrop of the state budget for 2023, was submitted to the Minister of Finance and subsequently approved by the Council of Ministers. This level of oversight is crucial for maintaining fiscal responsibility and public trust in the nation’s financial management.
How much did Cyprus’ state budget deficit increase by in 2023?
In 2023, Cyprus’ state budget deficit increased by €80 million, rising from €900 million in 2022 to €980 million in 2023. This escalation was primarily driven by higher expenditures exceeding revenues during the year.
What were the total revenues and expenditures in Cyprus for 2023?
In 2023, the total revenues in Cyprus amounted to €8.72 billion, while total expenditures reached €9.17 billion. This significant gap between revenues and expenditures contributed to the state budget deficit of €980 million for the year.
What were the primary sources of revenue for Cyprus in 2023?
Taxation remained the primary source of state revenue in Cyprus for 2023, excluding loan inflows and repayments. Tax revenue totaled €7.33 billion, with indirect taxes accounting for 47 percent and direct taxes making up 37 percent of the total revenue.
How did Cyprus manage its debt and borrowing dynamics in 2023?
As of December 31, 2023, Cyprus had total borrowing, excluding intragovernmental borrowing, of €22.18 billion. This figure reflected a slight reduction from €22.87 billion in 2022. The balance between loan inflows and repayments/issuance influenced the state budget deficit for the year.
