Cyprus budget deficit fails to shrink in 2012

The budget deficit under the previous government came in at EUR 1,127.3 mln, or 6.3% in 2012, the same percentage recorded in 2011.
Overall revenue edged up by only 0.2% despite a 2 percentage point increase in VAT among other things, while overall expenditure rose by 0.2% despite cuts implemented in late 2011.
The revenue performance was better in the fourth quarter than for the whole of the year, however.
In the fourth quarter total revenue reached a preliminary EUR 2,037.6 mln (EUR 2.0 bln), recording a 7.7% increase compared with the corresponding period of 2011.
The main categories of revenue for the period October-December 2012 were as follows:
*Taxes on production and imports EUR 741.7 mln (8.7% increase), of which VAT was EUR 415.5 mln (17.9% increase).
*Taxes on income and wealth EUR 558.2 mln (5.1% decrease as compared to the same period of 2011).
*Revenue from sales of goods and services increased by 17.9% compared with the corresponding period of the previous year.
On the other hand, the fourth-quarter expenditure performance, pushed up by unemployment, among other things, was worse.
Total expenditure reached EUR 2,576.1 mln in the fourth quarter, marking a 3.7% increase.
The main categories of expenditure for the period October-December 2012 were as follows.
*Compensation of employees EUR 836.7 mln (3.8% decrease)
*Social transfers EUR 777.0 mln (9.5% increase).
*Current transfers EUR 200.2 mln (compared to EUR 167.8 mln in the corresponding period of the previous year, or a 19.3% increase).
*Negative growth rates were observed in the categories of subsidies (41.1%), capital formation (23.5%) and intermediate consumption (5.4%).
The deficit in the fourth quarter was EUR 538.5mln, compared with EUR 592.4 mln deficit in the corresponding period of the previous year.