General Government Records Fiscal Deficit €187.9 Mn In The First Quarter Of 2021

General Government recorded a fiscal deficit of €187.9 mln for the period of January-March 2021, as compared to a surplus of €226.9 mln that was recorded during the period of January-March 2020, according to preliminary General Government fiscal results, which are prepared by the Statistical Service of Cyprus (CYSTAT).

During the first quarter an increase in expenditure and a decrease in revenue was recorded, mainly due to the measures taken to support enterprises and the suspension of various sectors of the economy, respectively, as a result of the Covid-19 pandemic. Increased amounts in specific categories of expenditure and revenue are partly attributed to the full implementation of the National Health System as of 01.06.2020. During the period of January-March 2021, total expenditure increased by €341.1 mn (+17.8%) and amounted to €2,258.6 mn, compared to €1,917.5 mn in the corresponding period of 2020.

Specifically, among the main categories of expenditure, social transfers increased by €78.6 mn (+10.5%) and amounted to €828.1 mn, compared to €749.5 mn in the corresponding quarter of 2020. Compensation of employees (including imputed social contributions and pensions of civil servants) increased by €30.1 mn (+4.6%) and amounted to €679.8 mn, compared to €649.7 mn in the first quarter of 2020. Subsidies increased by €264.4 mn and amounted to €274.8 mn, compared to €10.4 mn in the corresponding quarter of 2020.

The capital account decreased by €53.6 mn (-39.6%) to €81.9 mn (€57.0 mn capital formation and €24.9 mn capital transfers), from €135.5 mn (€114.3 mn capital formation and €21.2 mn capital transfers) in the first quarter of 2020. Intermediate consumption decreased by €11.9 mn (-6.9%) to €159.2 mn, from €171.1 mn in the corresponding quarter of 2020.

During the period of January-March 2021, total revenue decreased by € 73.7 mn (-3.4%) to € 2,070.7 mn, compared to € 2,144.4 mn in the corresponding period 2020. Specifically, among the main categories of revenue, taxes on production and imports decreased by € 13.0 mn (-1.7%) to € 738.8 mn, from € 751.8 mn in the corresponding quarter of 2020, of which net VAT revenue decreased by € 2.6 mn (-0.6%) to € 463.3 mn, from € 465.9 mn in the first quarter of 2020.
 
Revenue from the sale of goods and services decreased by € 18.1 mn (-12.6%) to € 125.3 mn, from € 143.4 mn in the corresponding quarter of 2020. Social contributions decreased by € 28.0 mn (-4.5%) to € 588.5 mn , from € 616.5 mn in the first quarter of 2020. Revenue from taxes on income and wealth decreased by € 31.4 mn (-6.1%) to € 480.4 mn, from € 511.8 mn in the corresponding quarter of 2020. On the contrary, capital transfers increased by € 15.6 mn (+ 32.8%) and amounted to € 63.2 mn, compared to € 47.6 mn in in the first quarter of 2020.

Source: CNA

Author: Christos Nikolaou

BEng Mechanical Engineering, MSc Real Estate, ETEK Property Valuer, Register and Licensed Real Estate Agent.

Christos Nikolaou is the founder and Managing Director of Property Canvas, he holds a license as an Estate Agent from the Association of Real Estate Agents of Cyprus and he is a registered Property Valuer in the Technical and Scientific Chamber of Cyprus (ETEK). He is the author of our “General Government Records Fiscal Deficit €187.9 Mn In The First Quarter Of 2021” and is a certified advance negotiator.