2025 budget — The Cyprus government has reported a 92 per cent expenditure rate for its 2025 budget, as outlined in a recent Treasury report. The document, published on Tuesday, reveals that actual spending reached €11.99 billion, slightly up from the previous year’s 91 per cent implementation rate.
025 budget: Revenue and Expenditure Insights
Total revenues for 2025 amounted to €10.20 billion, which is 87 per cent of the budgeted figure. This contrasts with 2024, where revenues totalled €10.81 billion, marking a 96 per cent implementation rate. The decline in revenue is largely attributed to a significant €1.07 billion drop in loan withdrawals, although increases in direct and indirect taxes helped to partially offset this decrease.
Taxation Trends
Direct taxes were notably higher in 2025, increasing by €0.37 billion to reach €3.79 billion, driven predominantly by a €0.32 billion rise in personal and corporate income tax. Indirect taxes also saw growth, with a 4 per cent increase compared to the previous year, bolstered by an €0.08 billion boost in VAT receipts, which reached €3.16 billion.
Changes in Expenditure
Expenditure has shown a slight reduction, primarily due to a €0.84 billion decrease in loan repayments. This was coupled with an increase in social benefits and transfers, with social benefit spending rising by 5 per cent to €2.02 billion, largely due to an €0.08 billion increase in healthcare benefits.
Stability in Payroll and Social Support
Payroll, pensions, and gratuities expenses remained stable, totalling €3.52 billion for the year. Transfers and grants also saw a significant rise of 11 per cent to €1.93 billion, driven by heightened government contributions to the Social Insurance Fund and increased grants to municipalities.
Capital Expenditure and Development Projects
Capital expenditure implementation stood at €469.3 million, with substantial investments directed towards the road network and construction projects. Notably, €97.3 million was allocated for road improvements, while €77.4 million was earmarked for various construction initiatives.
Co-Financed Projects and Educational Contributions
Co-financed projects achieved an implementation rate of €336.3 million, including €20.2 million for subsidies aimed at children under four and €12.8 million for home energy upgrades. Additionally, sponsorships and contributions to academic and research institutions reached €245.9 million, with €118.2 million specifically designated for the University of Cyprus.
Development Expenditure Performance
The Treasury highlighted that the development expenditure implementation reached 81 per cent in 2025, surpassing the ten-year average of 69 per cent. This performance reflects ongoing efforts to manage state finances effectively and invest in the future of Cyprus.
Long-term Trends in Budget Implementation
The average implementation rate for total state budget expenditure has remained steady at 91 per cent over the last decade, indicating a consistent approach to budget management. As Cyprus continues to navigate its financial landscape, these figures provide insight into the government’s fiscal health and priorities.
