CIG RECORDS SECOND QUARTER SURPLUS

By Staff Writer

Unaudited financial results for the second quarter of 2025 show a $194.0 million year-to-date surplus for core Government operations and a $201.5 million surplus for the Entire Public Sector (EPS). Net assets of the Government were $2.6 billion, with overall bank account balances of $494.8 million in cash and deposits.

According to the ‘Quarterly Financial Report for the Six-Month Period Ended 30 June 2025’, the overall EPS surplus of $201.5 million was $42.1 million, or 26 per cent, greater than the projected year-to-date operating surplus of $159.4 million.

It says: “This favourable position was due to actual revenues being higher than budgeted by $61.4 million for the period, primarily due to coercive revenues being $53.0 million higher than expected and investment revenues showing a positive variance of $7.3 million.”

Revenue exceeds expectations

The new report also explains that the higher-than-expected revenues were complemented by lower levels of expenditure in personnel costs, which were $8.8 million less than budgeted, as well as lower spending on supplies and consumables which was $8.2 million less than budgeted.

However, comparing year-on-year numbers, the EPS surplus was $14.9 million lower than that achieved for the same period in 2024.

Statutory Authorities and Government-owned Companies’ (SAGCs) results through the second quarter of 2025 showed a negative variance of $5.7 million when compared to the same period in 2024.

Compared to the same period in the prior year, total revenues of Core Government have increased by $51.5 million, while total expenses of Core Government have risen by $60.7 million for the comparable period.

The first six months of 2025 generated total revenues of $766.3 million, which was $61.4 million more than budgeted expectations and $51.5 million higher than the 2024 year-to-date actual results, mainly due to coercive revenues being $53.0 million higher than budgeted.

The bulk of this is credited to strong performances in the financial services sector.

Shortfalls

But the report also notes that, notwithstanding the overall favourable results, when compared to the 2025 Budget, there were certain areas that fell short of projected expectations. These include some key import duties, which amounted to $14.3 million less than anticipated, and $2.0 million less than the prior year-to-date amount.

Significantly, under the category of Total Investment Revenue, income of $12.0 million, which was $7.3 million more than anticipated for the six-month period, the report stated.

Government expenses for the first six months of 2025 amounted to $572.3 million, $27.8 million more than the year-to-date budget of $544.5 million. Compared to the prior year-to-date actuals, expenses for the second quarter of 2025 are $60.7 million higher.

The Government recorded some savings against budget in Personnel Costs by $8.8 million and Supplies & Consumables by $8.2 million. However, these savings were offset by higher-than-budgeted levels of expenditure in Outputs from SAGCs by $12.1 million, Outputs from Non-Governmental Suppliers by $20.3 million, and Transfer Payments by $21.3 million.

Outlook

The report concluded that while the Second Quarter’s performance has positioned the Government to be optimistic about its performance for 2025, costs will continue to increase as more personnel vacancies are filled and projects come online over the remaining two quarters of 2025.

“These costs will have to be diligently monitored to ensure spending is not incurred unnecessarily.  If the planned increases in operating activity occur during the remainder of 2025, the surplus as of 30 June 2025 is expected to be significantly reduced,” the report said.

This data, gazetted on Friday August 8th, suggest a trend contrary to the Pre-Election Financial and Economic Update produced by the Ministry of Finance and Economic Development in April this year and which was a main issue in the election campaign. That report had projected the likelihood of a KYD$26.2 million operating deficit by the end of this year.

While the current report suggests a more optimistic outlook, it remains to be seen if the surplus trend will be sustained to the end of the year.