Cyprus budget deficit almost halves in Q1

The budget deficit in Cyprus almost halved to EUR 76.5 mln in the first quarter of 2010, from EUR 137.7 mln in the first quarter of 2009, according to preliminary data on the general government accounts.
The budget deficit reached 6.44% of GDP in 2009, according to the latest government figures.
The main reason was a strong increase in revenue from income and wealth. Total revenue rose by 9.7% to EUR 1,730.9 mln, while taxes on income and wealth rose by 12.9% to EUR 452.2 mln.
On the other hand, taxes on production and imports fell by 4.3% to EUR 623.6 mln, of which VAT fell by 11% to EUR 417.9 mln.
Revenue from sales of goods and services decreased by 6.8% compared with the corresponding period of the previous year.
Total expenditure rose by 5.4% to EUR 1,807.4 mln. Within that, compensation of employees rose by 7.2% to EUR 633.2 mln and social transfers rose by 14.7% to EUR 584.5 mln.
Current transfers fell by 16.6% to EUR 151.5 mln.
Capital formation rose by 16.5% and intermediate consumption decreased by 2.4%.