You are here -allRefer - Reference - Country Study & Country Guide - Cyprus >

allRefer Reference and Encyclopedia Resource

allRefer    
allRefer
   


-- Country Study & Guide --     

 

Cyprus

 
Country Guide
Afghanistan
Albania
Algeria
Angola
Armenia
Austria
Azerbaijan
Bahrain
Bangladesh
Belarus
Belize
Bhutan
Bolivia
Brazil
Bulgaria
Cambodia
Chad
Chile
China
Colombia
Caribbean Islands
Comoros
Cyprus
Czechoslovakia
Dominican Republic
Ecuador
Egypt
El Salvador
Estonia
Ethiopia
Finland
Georgia
Germany
Germany (East)
Ghana
Guyana
Haiti
Honduras
Hungary
India
Indonesia
Iran
Iraq
Israel
Cote d'Ivoire
Japan
Jordan
Kazakhstan
Kuwait
Kyrgyzstan
Latvia
Laos
Lebanon
Libya
Lithuania
Macau
Madagascar
Maldives
Mauritania
Mauritius
Mexico
Moldova
Mongolia
Nepal
Nicaragua
Nigeria
North Korea
Oman
Pakistan
Panama
Paraguay
Peru
Philippines
Poland
Portugal
Qatar
Romania
Russia
Saudi Arabia
Seychelles
Singapore
Somalia
South Africa
South Korea
Soviet Union [USSR]
Spain
Sri Lanka
Sudan
Syria
Tajikistan
Thailand
Turkmenistan
Turkey
Uganda
United Arab Emirates
Uruguay
Uzbekistan
Venezuela
Vietnam
Yugoslavia
Zaire

Cyprus

The Government Sector

The government accounted for about 12 to 13 percent of GDP during the 1980s (see table 10, Appendix). The need to stimulate the economy after the division of the island in 1974 caused the government to abandon the old policy of balanced budgets and to adopt expansionary fiscal and monetary policies. The results were large and widening budget deficits paid for by borrowing at home and abroad. Domestic public debt rose from C7.5 million in 1976 to C161.5 million in 1988. Public and publicly guaranteed foreign debt increased from C61.8 million in 1976 to C602.5 million in 1988. The total public and publicly guaranteed domestic and foreign debt rose from C760.8 million in 1987 to C764 million (38.7 percent of GDP) in 1988. The foreign debt service ratio (total service payments as a percentage of exports of goods and services) was 11.8 in 1987 and 10.8 in 1988. Domestic borrowing only was used to cover the budget deficit in 1988. Thus, there was a decline in government foreign borrowing in 1988 to C602.5 million, compared to C617.5 million in 1987. Still, the burden of servicing the foreign debt continued to be significant. For instance, servicing the external debt was more than half the revenue from exports of domestically produced goods in 1987.

Furthermore, it was anticipated that the tariff reductions that would result from the Customs Union Agreement with the EEC would produce revenue losses, raising the fiscal deficit to C126 million in 1992, compared with C73.5 million in 1987. As a consequence, both public and foreign debts were expected to increase. The president of Cyprus, George Vassiliou, forecast a rise in the per capita public debt from C2,107 in 1987 to C3,563 in 1992 and a rise in the total foreign debt to C1,082 million in 1992.

Given the government's ever-present fiscal deficit, there were concrete proposals at the beginning of the 1990s for the introduction of a value added tax (VAT--see Glossary) to improve the state's finances. The Republic of Cyprus lacked a broad-based consumption tax, and a VAT would generate much revenue. The income tax system was also to be overhauled, to reduce tax evasion.

A specific look at government public finances shows that the Republic of Cyprus maintained three types of budgets: the Ordinary Budget, which included expenditures for government operations and other current expenses; the Development Budget, which included development programs; and the Special Relief Fund, which covered state aid for the housing and care of refugees.

Data as of January 1991

Cyprus - TABLE OF CONTENTS

  • The Economy

  • Go Up - Top of Page

    Make allRefer Reference your HomepageAdd allRefer Reference to your FavoritesGo to Top of PagePrint this PageSend this Page to a Friend


    Information Courtesy: The Library of Congress - Country Studies


    Content on this web site is provided for informational purposes only. We accept no responsibility for any loss, injury or inconvenience sustained by any person resulting from information published on this site. We encourage you to verify any critical information with the relevant authorities.

     

     

     
     


    About Us | Contact Us | Terms of Use | Privacy | Links Directory
    Link to allRefer | Add allRefer Search to your site

    allRefer
    All Rights reserved. Site best viewed in 800 x 600 resolution.