Nicosia: The implementation of Cyprus’ state budget for the period January-May 2025 shows a significant increase in government revenues and a containment of expenditures, according to data released by the Treasury of the Republic.
According to Cyprus News Agency, revenues reached £3.61 billion, marking an 8% increase compared to the same period last year (£3.33 billion). This rise was mainly attributed to a £0.14 billion increase in direct taxes and a £0.07 billion increase in indirect taxes. These revenues accounted for 31% of the annual budget, compared to 30% in 2024.
On the expenditure side, payments by the end of May amounted to £3.62 billion, corresponding to 28% of the total budget, up from 27% in 2024. The increase was primarily due to payroll expenses, which rose by 7%, or £0.09 billion, reaching £1.36 billion.
In terms of tax revenues, indirect taxes experienced a 4% rise (£0.07 billion), driven by higher VAT revenues and other indirect taxes. Direct taxes saw an 11% increase (£0.14 billion), with income tax from both legal and natural persons showing significant growth.
Regarding expenditures, social benefits reached £0.78 billion, marking a 3% increase due to higher healthcare-related spending. Transfers and subsidies rose by 13%, largely due to increased contributions to the Social Insurance Fund and more grants to municipalities.
A notable decline was observed in loan and interest repayments, which totaled £0.27 billion, down from £0.53 billion in 2024. Operating and other expenses also decreased by 9%.
The implementation rate of the budget, as a percentage of the final budget, remains consistent with the ten-year average of 28%, excluding the years 2020-2022, which had higher rates due to seasonal public debt repayments.
Development expenditures by May amounted to £304 million, representing 20% of the annual forecast, which is above the ten-year average of 17%.
As for development spending, by the end of May, capital expenditures totaled £116 million. The majority was allocated to road projects (£31.5 million), government buildings, and schools. Co-financed projects amounted to £72 million, including initiatives like the ‘Save – Upgrade Homes’ scheme and entrepreneurship support.
Grants and contributions to universities and research institutes reached £81.5 million, with the largest allocations going to the University of Cyprus (£46.2 million) and the Cyprus University of Technology (£25.6 million). Social benefits by the end of May amounted to £27.3 million.