Government posts fiscal surplus of 0.4% of GDP in 2016 (Update-1)


(Updates with Eurostat figures in fifth paragraph)

By Stelios Orphanides

The Cypriot government generated a fiscal surplus of €64.4m, or 0.4 per cent of economic output, in 2016, after posting deficits over the past in eight years, the statistical service said.

Improved fiscal performance was on a 1.5 per cent increase in revenue last year to over €7bn, accompanied by a 2.4 per cent drop in spending to below €7bn, Cystat said in a statement on its website on Monday.

The government posted a fiscal surplus of €146.3m in the first quarter and a deficit of €188.7m from April to June, Cystat said. In the third and fourth quarters, the budget produced a surplus of €185.8m and a deficit of €79m respectively.

In 2015 and 2014, when the government had posted fiscal shortfalls of €208.9m and €1.5bn, or 1.2 per cent and 8.8 per cent respectively, it was mainly on capital assistance extended to the Cooperative banking sector.
Until October, the government was expecting to generate a fiscal deficit of 0.3 per cent of the economy last year.

According to a Eurostat statement published also on Monday, Cyprus was among the best fiscal achievers in the 19-member currency bloc last year. Luxembourg generated the largest fiscal surplus of 1.6 per cent of gross domestic product, followed by Malta with 1 per cent, Germany and Greece with 0.8 per cent and 0.7 per cent respectively. The Netherlands also generated a fiscal deficit of 0.4 per cent.


About Author

Stelios Orphanides is a journalist at To contact Stelios Orphanides: [email protected]

  • Eye on Cyprus

    At this rate, how long will it take to settle Government debt of about 106% of GDP? Answers please on a postcard to Harris Georgiades. Closing date for entries: January 1st, 2198.

    • StephenD

      The “right” level of government debt is not 106% of GDP, but it’s not 0%, either, so your question is moot. For what it’s worth, my estimate is 2029 to get below 60% (assuming 0.4% surplus, inflation of 2% and growth of 2.5% – obviously all hugely variable).

    • Infinity & beyond ?

      • Barry White

        Deflector shields up, Scottie. And full warp speed away.

  • Kevin Ingham

    “Fiscal surplus” is just about the silliest figure in economics- it is simply the balance on what a government takes in and pays out, without taking account of interest and capital repayments on loans

    Cyprus needs to generate a fiscal surplus of about 3-4% pa to service it’s loans and pay them back in a reasonable time scale, but such a surplus will create higher unemployment and deflation, which in turn creates an economic downward spiral

    • StephenD

      The expenditure quoted, and the 0.4% surplus resulting, _do_ take into account interest payments (of €464.7m). The primary fiscal surplus (without loan interest payments) is in the 3-4% range you suggest.