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Cyprus Collects €7.51 Billion In Revenue As Public Spending Accelerates

by THEFUTURE.TEAM

November 2, 2026

Cyprus recorded government revenue of €7.51 billion in the first nine months of 2026, while expenditure reached €7.01 billion, leaving a surplus of approximately €500 million before borrowing-related cash flows, according to a report published by the Treasury.

Revenue between January and September increased by €670 million compared with the same period in 2025, while expenditure rose by €410 million. Development spending reached 44% of its annual allocation, up from 41% a year earlier and above the 10-year average of 36%. Of the €1.62 billion budgeted for development, €711.6 million had been spent by the end of September.

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Tax Collections Drive Revenue Growth

Higher direct and indirect tax receipts accounted for the increase in government revenue.

Direct tax collections rose by 17%, or €480 million, to €3.05 billion. Higher income tax payments from individuals and businesses contributed €470 million to this increase.

Indirect tax revenue grew by 8%, or €250 million, to approximately €3.25 billion. VAT was the main contributor, with receipts rising from €2.29 billion to €2.56 billion.

Social Benefits And Operating Costs Increase

Government expenditure rose from €6.60 billion in the first nine months of 2025 to €7.01 billion this year. Salaries, pensions and gratuities remained the largest category at €2.45 billion.

Social benefits increased by €100 million, or 7%, to €1.47 billion, mainly due to higher healthcare spending. Transfers and grants rose by €110 million to €1.42 billion, including a €30 million increase in the government’s contribution to the Social Insurance Fund.

Operational and other expenditure climbed by €150 million to €740 million. Defence and policing accounted for €250 million, while general operating costs reached the same amount. Government financing costs stood at €460 million, slightly below the €480 million recorded a year earlier.

Development Investment Reaches €711.6 Million

Capital expenditure totalled €243.6 million by the end of September. Road network projects received €49.3 million, followed by construction projects at €39.5 million. Other allocations covered government buildings, equipment, water and sewerage systems, and school infrastructure.

A further €216.6 million went towards co-funded projects and other financing expenditure, including EU-funded initiatives, childcare subsidies, sustainable urban mobility and energy-efficiency schemes.

Grants and subsidies totalled €168.3 million. The University of Cyprus received €93 million, while the Cyprus University of Technology was allocated €48.4 million. Development-related social benefits accounted for another €40.9 million, covering education, healthcare, renewable energy and housing.

2026 Budget Forecasts Higher Revenue And Spending

The full-year budget projects government revenue of €10.78 billion, 5% above the €10.31 billion recorded in 2025. Expenditure is expected to reach €11.53 billion, up 4% from €11.13 billion.

Higher direct tax receipts and grants are expected to drive revenue growth, while operating costs are projected to account for the largest increase in expenditure.

The budget also includes €1.9 billion in borrowing-related inflows and €2.28 billion in outflows. During the first nine months, actual inflows reached €1.35 billion, compared with €70 million a year earlier. Outflows totalled €2.14 billion, up from €160 million.

These figures reflect government borrowing and debt repayments, which are recorded separately from ordinary revenue and expenditure.

Overall, the figures show stronger tax collections and rising public spending, with development investment progressing faster than its recent historical average.

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Cyta Plans €70 Million Investment Budget For 2027, Including Renewable Energy Expansion

by THEFUTURE.TEAM

November 2, 2026

Cyprus telecommunications provider Cyta has budgeted €70 million for investments in 2027, with funding earmarked for a new data center and an initial move into renewable energy. The investment budget is 75% higher than the €40 million allocated for 2026.

According to an explanatory note accompanying the budget submitted to Parliament, the funds will support subsidiaries responsible for delivering two major projects. The budget does not specify how much will go toward each project.

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A New Data Center And A Renewable Energy Business

The first project is a new data center, which Cyta expects to complete over two years. The organization says the facility will serve its customers, Cyprus-based businesses, government and other public-sector bodies, as well as customers abroad.

The second project involves renewable energy. Cyta plans to enter the energy market commercially, including by meeting the power needs of its new data center. The budget provides no further details about the scale or structure of the energy investment.

Parliament cleared the way for Cyta to operate in the energy sector last March, approving legislation that allows the organization to participate through renewable energy sources. An amendment passed by a majority bars it from investing in conventional fuels. The move was opposed by the Electricity Authority of Cyprus, or EAC.

Cyta has said it intends to focus on consumers who cannot readily access renewable energy themselves. Its target groups include young couples renting homes, apartment residents and small businesses that lack suitable space to install their own solar panels.

Pension Fund Deficit Continues To Grow

The budget also highlights a widening actuarial deficit in Cyta’s employee pension scheme. A recent actuarial study put the funding shortfall at €211.56 million as of December 31, 2025, up from €140.07 million a year earlier and €85.59 million at the end of 2023.

In response, Cyta’s board increased the annual contribution rate to 4.6%, from 3.9%, and approved a schedule of payments intended to clear the deficit over eight years. The organization will pay €30 million this year, followed by €23 million in 2027 and €25 million in 2028.

From 2029 through 2032, annual payments are set at €33.391 million. A final payment of €29.54 million is scheduled for 2033.

Revenue And Surplus Forecast To Rise

Cyta’s 2027 budget forecasts a pre-tax surplus of €40.09 million and a post-tax surplus of €34.92 million. The projected pre-tax surplus is 14.85% higher than in 2026, an increase of €5.2 million.

Revenue is forecast to reach €478.48 million in 2027, up 6.2% from €450.57 million in 2026. Budgeted expenses are €438.39 million, compared with €415.67 million this year.