Nicosia: The Treasury report on the state budget implementation for 2025 reveals a completion rate of 87% for revenues and 92% for actual expenditures. The figures reflect a nuanced financial landscape as the country navigates economic challenges.
According to Cyprus News Agency, the report highlights that 2025 revenues amounted to pound 10.20 billion, which is 87% of the planned state budget. This marks a decrease from the previous year's revenue of pound 10.81 billion, which achieved a 96% implementation rate. On the expenditure side, the report shows actual spending of pound 11.99 billion, representing a 92% execution of the budget, slightly improved from the 91% rate in 2024, which totaled pound 12.42 billion.
The Treasury notes that the decline in revenues can be attributed primarily to a drop in loan proceeds by pound 1.07 billion. However, this shortfall was partially offset by an increase in direct and indirect taxes of pound 0.37 billion and pound 0.17 billion, respectively.
A closer examination of expenditures reveals a reduction mainly due to lower loan repayments, down by pound 0.84 billion. This was balanced by a rise in spending on social benefits and transfers and grants, which increased by pound 0.10 billion and pound 0.18 billion, respectively.
In terms of tax revenues, indirect taxes rose by pound 0.17 billion (4%) compared to 2024, driven by higher VAT revenues and increased returns from other indirect taxes and excise duties. Direct taxes witnessed a 6% increase, primarily due to enhanced corporate and personal income tax revenues.
The report elaborates that the decrease in loan proceeds for 2025, totaling pound 0.10 billion compared to pound 1.17 billion in 2024, is largely due to the rescheduling of a pound 1 billion loan to January 2026 instead of December 2025.
Loan and interest repayments for 2025 reached pound 2.54 billion, with significant portions allocated to external loan repayments and interest payments. The expenditure on wages, pensions, and gratuities saw a marginal decrease.
Social benefits expenditure grew by 5% to pound 2.02 billion, fueled by increased healthcare benefits and a grant to the Renewable Energy Sources Fund. Conversely, social welfare benefits experienced a slight decline.
Transfers and grants rose by 11% to pound 1.93 billion, while operating and other expenses fell by 3%. The report also covers capital expenditure implementation, which amounted to pound 469.3 million, and co-financed projects, which reached pound 336.3 million, alongside the realization of grants, contributions, and subsidies totaling pound 245.9 million.