Overview Of The Fiscal Report
Cyprus recorded a state budget deficit of €1.79 billion in 2025, according to the latest fiscal report from the Treasury. The report compares planned and actual revenues and expenditures and is submitted annually by the Accountant General within three months of the financial year’s end.
Fiscal Report Insights And Approval Process
The report was prepared by Accountant General Andreas Antoniades and submitted to Finance Minister Makis Keravnos on March 12, 2026. It was approved by the Cabinet on March 16 and later submitted to the House of Representatives on March 23. An audit by the Auditor General is also included, supporting the accuracy of the financial data.
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Revenue And Expenditure Trends
Revenues, excluding loan-related inflows, reached €10.05 billion in 2025, up from €9.57 billion in 2024, while expenditures rose to €10.15 billion from €9.89 billion. This resulted in a pre-borrowing deficit of €0.10 billion, compared to €0.32 billion the previous year.
Impact Of Loan Activities On The Fiscal Position
Once loan activity is included, the overall deficit widens. Loan drawdowns and repayments fell to €0.16 billion in 2025, down from €1.24 billion in 2024. At the same time, spending related to loan repayments and issuances declined to €1.85 billion from €2.53 billion. As a result, the total budget deficit increased to €1.79 billion, compared to €1.61 billion a year earlier.
The Central Role Of Taxation
Tax revenue remained the main source of state income, reaching €8.6 billion in 2025, up from €8 billion in 2024. This accounts for around 86% of total revenues. The structure remained broadly unchanged, with 44% coming from indirect taxes and 42% from direct taxes.
Key Expenditure Categories And Public Debt Overview
Spending on public sector wages, pensions and gratuities totalled €3.52 billion. Social benefits reached €2.02 billion, including a €0.82 billion state contribution to the General Healthcare System. Grants and contributions to public entities and international organisations amounted to €1.67 billion.
Total government debt, excluding intra-government borrowing, declined to €19.24 billion at the end of 2025, from €20.92 billion a year earlier. At the same time, intra-government borrowing increased to €13.21 billion from €12.03 billion.
Conclusion
The report shows a narrowing deficit before borrowing, alongside a higher overall deficit once loan activity is included. At the same time, tax revenues continue to support public finances, while government debt remains on a downward path.
