Nicosia: In the first half of 2026, the implementation of development expenditure from the 2026 state budget stood at 25%, matching the 25% figure from the corresponding period in 2025 and surpassing the 22% annual average for the last decade.
According to Cyprus News Agency, the Treasury of the Republic reported that the total development expenditure for 2026 amounts to 1.62 billion euros, with 412.39 million euros spent by the end of the first half of the year. A report titled 'Implementation of the State Budget' published on Friday by the Treasury details that revenue at the end of June 2026 reached pound 4.44 billion, which corresponds to 41% of the state revenue budget. This compares to pound 4.21 billion, also 41%, in 2025. Meanwhile, actual expenditure stood at pound 4.63 billion, representing 40% of the budget, consistent with the 40% recorded in 2025 at pound 4.41 billion.
Revenue has increased compared with the same period last year, mainly driven by a rise in revenue from indirect and direct taxes, which increased by pound 0.17 billion and pound 0.09 billion, respectively. The report also noted that the increase in expenditure compared to revenue is primarily attributed to rises in transfers and grants by pound 0.11 billion, operating expenditure by pound 0.08 billion, and social benefits by pound 0.05 billion.
Inflows from borrowings and repayments of loans issued in the first half of 2026 amounted to pound 1.25 billion, a significant increase from pound 0.03 billion in 2025. Outflows from repayments and the issuance of loans amounted to pound 2.09 billion, compared to pound 0.11 billion in 2025.
Regarding the overall state budget for 2026, which is prepared on a cash basis, there is a projected 5% increase in revenue for the year, reaching pound 10.78 billion from pound 10.31 billion in 2025. Expenditure is also expected to rise by approximately 3%, with 2026 figures projected at pound 11.44 billion compared to pound 11.13 billion in 2025. The Treasury attributes the projected revenue increase mainly to a rise in direct taxes of pound 0.13 billion and in grants of pound 0.33 billion, while the increase in expenditure is largely due to a rise in operating expenditure of pound 0.36 billion.
Cash flows from borrowing were budgeted with inflows of pound 1.9 billion and outflows of pound 2.28 billion, the Treasury noted.