2004 budget deficit drops to 4.2% of GDP

Cyprus on course for the euro

According to preliminary general government fiscal accounts for 2004, which are calculated according to EU norms, the budget deficit fell to CYP 306.3 mln, or 4.2% of GDP in 2004, compared with CYP 427.7 mln, or 6.3% of GDP in 2003 and a previous official estimate of 4.8% of GDP.

Total revenues rose by 7.7% to CYP 2866.9 mln, while total expenditure rose by 2.7% to CYP 3173.2 mln

Despite the fall in the annual deficit, the total stock of public debt rose, to 71.9% of GDP, or CYP 5203.6 mln compared with 69.8% of GDP, or 4715.5 mln in 2003.

The main categories of income in 2004 were: taxes on production and imports at CYP 1165.3 mln, of which VAT reached CYP 666.4 mln (a rise of 11.5% on 2003), income and wealth taxes, which rose by 1.1% to CYP 665.7 mln, social contributions (up by 27.7% to CYP 613.9 mln) and income from goods and services, which rose by 2.6% to CYP 190.1 mln.

The main categories of expenditure, meanwhile, were wages and salaries, which rose by 5.1% to CYP 1121.1 mln, social expenditure (up 8% to CYP 839.5 mln), interest payments on loans (up 4% to CYP 244.0 mln, goods and services down 21.4% to CYP 318 mln, and capital expenditure up 10% to CYP 254.1 mln.

A full analysis of the budget will appear in the Research Centre area of our website under Economy: Budget policy, as well as in the print edition of the Financial Mirror on March 2.