The fiscal deterioration in January to April resulted mainly from an 11% drop in public revenue to €1.9 billion compared to a year before, as public spending fell 2.2% to below €2 billion, the Finance Ministry said in a statement on its website today.

The government balance, which is the difference between overall revenue and spending, excluding the interest payments on public debt, dropped to €69.7 million from €281.6 million.

The drop in revenue in January to April was mainly on a 9% decrease in direct tax revenue to €590.9 million compared to a year ago, which more than offset a 4.5% rise in indirect tax revenue to €797.5 million, the ministry said. Non-tax revenue dropped 56% to €179.7 million while social insurance contributions rose 5.2% to €324.6 million.

In a separate statement, the Finance Ministry said that the drop in non-tax revenue in the first four months of the year has to do with a delay in the payment of Central Bank of Cyprus and the Cyprus Ports Authority dividend. The two organisations transferred to the central government €181.4 million and €15 million respectively.

On the other hand, the drop in public expenditure resulted mainly from an annual 6% and 2.3% decrease in the social insurance outlays and public payroll in the first four months of the year to €452.5 million and €517.3 million respectively, as well as a 7.7% decline in interest payments to €134 million, the Finance Ministry said. Other current transfers and pensions and gratuities rose 3.5% and 5.8% to €461.9 million and €202.4 million respectively.

Source: Cyprus Mail