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Cyprus Government Budget 2025: Execution Remains Strong Amid Fiscal Adjustments

by THEFUTURE.TEAM

February 26, 2026

Overview Of The 2025 Government Budget Implementation

The General Accounting Office reported solid execution of the 2025 government budget, with revenues reaching 87% of projections and expenditures reaching 92% of planned levels. By comparison, execution rates in 2024 stood at 96% for revenues and 91% for spending.

Projected state revenue for 2025 totals €10.20 billion, down from €10.81 billion in 2024, while planned expenditures declined to €11.99 billion from €12.42 billion a year earlier.

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Revenue Performance: Borrowing Contractions And Tax Increases

The decline in overall revenue was largely driven by reduced borrowing, which fell to €0.10 billion from €1.17 billion in 2024. The shortfall was partially offset by stronger tax collection.

Direct taxes increased by €0.37 billion, while indirect taxes rose by €0.17 billion. VAT receipts reached €3.16 billion, up from €3.08 billion in the previous year, supported by higher consumption activity. Direct tax revenues rose 6%, driven mainly by higher personal and corporate income tax collections, which reached €3.79 billion.

Expenditure Management: Lower Debt Costs And Higher Social Support

On the expenditure side, reduced loan repayments lowered overall spending by €0.84 billion. At the same time, social benefits and transfers increased.

Social benefits rose by €0.10 billion to €2.02 billion, reflecting higher healthcare-related spending and increased allocations to the Renewable Energy Sources Fund. Transfers and grants grew by €0.18 billion, reaching €1.93 billion, supported by higher contributions to the Social Security Fund and increased subsidies to municipalities.

Development And Capital Expenditures: Infrastructure Focus

Capital expenditure execution reached €469.3 million in 2025, with investment concentrated in road infrastructure, construction projects, water and wastewater systems, and public facilities, including educational buildings.

Co-financed projects totaled €336.3 million, supporting non-governmental initiatives such as education and child nutrition programs, housing renovation schemes, and digital transformation projects.

Historical Context And Overall Performance

The report notes that average government spending execution over the past decade has been around 91%, placing 2025 in line with historical performance. Development expenditure execution reached 81%, improving from the long-term average of 69%, partly reflecting a €67.1 million reduction in the initial budget allocation.

For further details on the state budget and fiscal performance, you may refer to the official report by the General Accounting Office and the continuing analysis available from financial news platforms, including reports on government budgeting.

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Only 1% Of Cyprus Farms Use Precision Farming Technologies

Cyprus remains one of the European Union’s least digitised agricultural economies, with just 1% of farms using precision farming technologies in 2023, according to Eurostat.

The findings come as the EU continues to encourage the adoption of digital tools aimed at improving agricultural productivity, efficiency and sustainability.

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Internet Access Expands, But Digital Uptake Lags

Internet access has improved across the bloc, although adoption remains uneven. Eurostat found that 43% of EU farms had internet access in 2023, with northern and central European countries leading the way.

Denmark, Germany, Slovakia, Latvia, the Czech Republic and Austria all reported internet access rates above 90%.

Greater connectivity, however, has not translated into widespread digital adoption. Farm management information systems, which help farmers manage day-to-day operations, were used by only about 11% of EU farms. France was a notable exception, with around 60% of farms using the technology.

Precision Farming Concentrated In Larger Operations

Robotics adoption also remained relatively limited, with only about 7% of EU farms using robotic technologies. Overall, around 18% of farms with utilised agricultural area employed at least one precision farming technology or practice in 2023.

These included robotics for plant protection, band spraying, variable-rate application, precision crop monitoring and soil analysis. Despite representing fewer than one in five farms, these holdings accounted for around 44% of the EU’s utilised agricultural area.

The figures suggest that precision farming remains concentrated among larger agricultural businesses, where investment in digital technologies is typically easier to support.

Cyprus Lags Behind EU Leaders

Luxembourg, Finland and Estonia recorded the highest shares of utilised agricultural area managed by farms using precision farming technologies, each exceeding 75%.

At the other end of the ranking, Cyprus recorded just 1%, while Greece and Romania reported between 10% and 15%. The results indicate that Cyprus remains at an early stage of digital adoption in agriculture, even as precision farming becomes more widespread across parts of the European Union.