Budget Overview
Cyprus recorded an 87% revenue implementation rate and a 92% expenditure implementation rate in the 2025 state budget, according to the latest Treasury report. Total revenue reached €10.20 billion, compared with €10.81 billion in 2024, while total expenditure amounted to €11.99 billion versus €12.42 billion a year earlier.
Revenue Trends And Tax Contributions
The decline in revenue was mainly linked to a €1.07 billion drop in loan withdrawals. This was partly offset by stronger tax collection. Direct taxes increased by €0.37 billion, while indirect taxes rose by €0.17 billion.
Follow THE FUTURE on LinkedIn, Facebook, Instagram, X and Telegram
VAT revenue grew by 4% to €3.16 billion, reflecting an increase of €0.08 billion. Direct taxes rose by 6% to €3.79 billion, supported by higher personal and corporate income tax receipts.
Expenditure Dynamics And Social Investments
Overall expenditure declined slightly, largely due to a €0.84 billion reduction in loan repayments. At the same time, social benefits increased by 5% to €2.02 billion, mainly driven by an €0.08 billion rise in healthcare-related spending.
Transfers and grants rose 11% to €1.93 billion, reflecting higher contributions to the Social Insurance Fund and increased support for municipalities. Operating expenses fell by 3% to €1.12 billion, while payroll, pensions, and gratuities remained stable at €3.52 billion.
Capital Expenditure And Co-Financed Projects
Capital expenditure reached €469.3 million. Key allocations included road infrastructure (€97.3 million) and construction projects (€77.4 million), alongside investments in water systems, government buildings, and school expansions.
Co-financed projects implemented €336.3 million. Funding covered initiatives such as subsidies for childcare and nutrition programs for children under four, as well as residential energy-efficiency upgrades.
Comparative Analysis And Development Expenditure
The average state budget expenditure implementation rate over the past decade stands at 91%. Development expenditure implementation reached 81% in 2025, exceeding the ten-year average of 69%.
The data indicates continued fiscal discipline combined with increased execution of development projects and targeted social spending.
