Nicosia: By the end of March 2025, the implementation of the state budget, in terms of revenue, reached 19% (pound 2.22 billion), compared to 18% (pound 2 billion) in 2024. In terms of actual expenditure, it reached 15% (pound 1.95 billion), up from 14% (pound 1.84 billion) in 2024, according to the implementation report prepared by the Treasury of the Republic of Cyprus, published on Thursday.
According to Cyprus News Agency, the slight increase in revenue compared to last year is mainly due to an increase in indirect and direct taxes by pound 0.08 billion and pound 0.10 billion respectively. Similarly, the slight increase in budget implementation in terms of expenditure is attributed to a rise in social benefits by pound 0.03 billion (2025: pound 0.39 billion, 2024: pound 0.36 billion).
More specifically, indirect taxes rose by pound 0.08 billion (8%) compared to 2024, mainly due to a pound 0.04 billion increase in VAT revenue (2025: pound 0.75 billion, 2024: pound 0.71 billion). Direct taxes increased by pound 0.10 billion (11%) compared to 2024, mainly due to higher income tax revenue from legal and natural persons (2025: pound 0.87 billion, 2024: pound 0.79 billion) and an increase in property tax revenue (2025: pound 0.06 billion, 2024: pound 0.04 billion).
By the end of March 2025, loan withdrawals amounted to pound 0.01 billion. Regarding wages, pensions, and gratuities, budget implementation at the end of March shows an increase of 7% (pound 0.05 billion), from pound 0.76 billion in 2024 to pound 0.81 billion in 2025.
Loan and interest repayments by the end of March totaled pound 0.11 billion (2024: pound 0.12 billion), of which pound 0.07 billion (2024: pound 0.08 billion) was for interest and charges, pound 0.03 billion (2024: pound 0.04 billion) for domestic loan repayments, pound 0.01 billion (2024: pound 0.00 billion) for external loan repayments.
Spending on social benefits reached pound 0.39 billion (2024: pound 0.36 billion), with the pound 0.03 billion (8%) increase mainly due to a rise in social welfare benefits by pound 0.05 billion (2025: pound 0.19 billion, 2024: pound 0.14 billion), a reduction in health benefits by pound 0.03 billion (2025: pound 0.13 billion, 2024: pound 0.16 billion).
Transfers and subsidies up to the end of March reached pound 0.40 billion (2024: pound 0.36 billion), an increase of pound 0.04 billion (11%), mainly due to an increase in the national contribution to gross national income by pound 0.02 billion (2025: pound 0.07 billion, 2024: pound 0.05 billion) and an increase in the General Government Contribution to the Social Insurance Fund by pound 0.02 billion (2025: pound 0.17 billion, 2024: pound 0.15 billion).
Operational and other expenses amounted to pound 0.15 billion (2024: pound 0.17 billion). Capital expenditure implementation by the end of March reached pound 46.8 million, mainly allocated to road network (pound 11.3 million), construction, expansion, and improvement of school buildings (pound 7.4 million), government office buildings (pound 5.3 million), land and building purchases (pound 4.5 million), construction works (pound 4.3 million), fixed and mobile machinery (pound 2.7 million) and sewerage and water systems (pound 2.1 million).
Co-funded and other financing expenses reached pound 42.9 million. Grants, contributions, and subsidies reached pound 26.2 million, primarily for University of Cyprus (pound 16.2 million), Cyprus University of Technology (pound 6.3 million) and Open University of Cyprus (pound 1.8 million).
Social benefits totaling pound 11 million were mainly for education benefits, grants to volunteer organisations, cultural grants and housing benefits.
According to the Treasury, over the past decade (excluding 2020), the average implementation rate of total state budget expenditures by the end of March was 17%. The highest implementation rate was in 2020 (27%), mainly due to the early repayment of an IMF loan of pound 0.71 billion. For 2025, the implementation rate stands at 15%.
Additionally, the average implementation rate for development expenditures by the end of March over the last decade was 8%, matching the 2025 rate.