Nicosia: By the end of July, implementation of the state budget had reached 50% on the revenue side and 47% on the expenditure side. According to Cyprus News Agency, by the end of July 2026, actual revenues and expenditures both stood at pound 5.43 billion, representing equal execution in absolute terms.
Compared with the same period in 2025, revenues increased by pound 0.26 billion, mainly due to higher receipts from indirect and direct taxes, which rose by pound 0.16 billion and pound 0.15 billion, respectively.
Expenditure increased by pound 0.26 billion, mainly as a result of higher operating expenditure (pound 0.11 billion), transfers and grants (pound 0.09 billion), and social benefits (pound 0.08 billion).
Borrowing inflows amounted to pound 1.31 billion (2025: pound 0.06 billion), while borrowing outflows stood at pound 2.10 billion (2025: pound 0.13 billion).
Indirect taxes increased by a net pound 0.16 billion (7%) compared with 2025, mainly due to higher VAT receipts, which rose by pound 0.20 billion to pound 1.98 billion in 2026, from pound 1.78 billion in 2025. Similarly, direct taxes increased by a net pound 0.15 billion (8%), driven by higher income tax receipts from legal entities and individuals, which increased by pound 0.16 billion to pound 1.95 billion in 2026, compared with pound 1.79 billion in 2025.
According to the Treasury, over the past decade, the average implementation rate for total state budget expenditure by the end of July was 47%, the same level recorded in 2026. Expenditure on salaries, pensions, and gratuities showed a slight decrease compared with the same period last year, falling from pound 1.91 billion in 2025 to pound 1.90 billion in 2026.
Social benefit expenditure reached pound 1.13 billion by the end of July 2026, compared with pound 1.06 billion in 2025. Transfers and grants amounted to pound 1.13 billion in 2026, compared with pound 1.05 billion in 2025, an increase of approximately pound 0.08 billion (8%). Meanwhile, operating and other expenditure reached pound 0.53 billion by the end of July 2026, compared with pound 0.41 billion in 2025.
By the end of July 2026, financing expenditure, including interest payable and related costs, amounted to pound 0.43 billion, compared with pound 0.44 billion in 2025. Loan proceeds and repayments of loans issued amounted to pound 1.32 billion by the end of July 2026, compared with pound 0.06 billion in 2025. Loan repayments and lending to third parties totaled pound 2.11 billion, compared with pound 0.13 billion in 2025. Of this amount, pound 2.06 billion related to the repayment of external loans, while pound 0.05 billion related to the repayment of domestic loans.
Moreover, capital expenditure implementation stood at pound 165.7 million by the end of July 2026. According to the Treasury, expenditure on co-financed projects and other financing expenditure reached pound 134.3 million. Implementation of grants, contributions, and subsidies amounted to pound 150 million, while social benefit expenditure amounted to pound 29.2 million.
The Treasury noted that, over the past decade, the average implementation rate for development expenditure by the end of July was 28%. In 2026, the implementation rate had reached 32%.