The implementation of the State Budget in relation to revenue during the first 11 months of 2025 recorded a decrease compared to the corresponding period last year, while, on the contrary, there was a slight increase in the implementation of the state budget in relation to expenditure, as announced by the Treasury of the Republic.
Presenting the results of the State Budget implementation report for the period from January 1 to November 30, 2025, the Treasury stated that the State Budget, which is prepared on a cash basis, shows a 4% increase in revenue for the year 2025 (2025: €11.75 billion, 2024: €11.28 billion) and a 4% decrease in expenditure (2025: €13.01 billion, 2024: €13.60 billion).
It is added that the projected increase in revenue is mainly due to a rise in direct and indirect taxes of €0.27 billion and €0.17 billion, respectively, while the projected reduction in expenditure is mainly due to lower loan repayments of €0.76 billion, combined with increased social benefit expenditure of €0.15 billion.
Regarding the implementation of the State Budget, it is noted that at the end of November 2025 revenues amounted to €8.60 billion, which corresponds to 73% of the state budget (2024: €9.20 billion, 82%), and actual expenditure amounted to €9.59 billion, corresponding to a 74% implementation (2024: €9.65 billion, 71%).
It is also noted that the implementation of the State Budget in relation to revenue shows a decrease from the corresponding period last year (2025: 73%, 2024: 82%), mainly due to a €1.05 billion decrease in borrowing, which is offset by an increase in direct and indirect taxes of €0.17 billion and €0.14 billion, respectively, while the implementation of the state budget in relation to expenditure shows a slight increase (2025: 74%, 2024: 71%), mainly due to an increase in transfers and subsidies of €0.14 billion.
In particular, with regard to state revenues, it is reported that indirect taxes increased by €0.14 billion (4%) compared to 2024, mainly due to an increase in VAT revenues of €0.07 billion (2025: €2.92 billion, 2024: €2.85 billion), revenue from other indirect taxes by €0.04 billion (2025: €0.49 billion, 2024: €0.45 billion) and excise duty revenue by €0.03 billion (2025: €0.49 billion, 2024: €0.46 billion).
Similarly, direct taxes increased by €0.17 billion (6%) compared to 2024, mainly due to an increase in corporate and personal income tax of €0.13 billion (2025: €2.92 billion, 2024: €2.79 billion). Also, by the end of November 2025, loan withdrawals amounted to €0.09 billion (2024: €1.14 billion).
Salaries, pensions and gratuities
Regarding the implementation of the State Budget for total expenditure, for the category of salaries, pensions, and gratuities, the implementation at the end of November shows a slight decrease of €0.03 billion, from €3.04 billion in 2024 to €3.01 billion in 2025.
In addition, loan and interest repayments up to the end of November amounted to €1.87 billion (2024: €2.06 billion), of which €1.23 billion (2024: €1.07 billion) relates to the repayment of external loans, €0.56 billion (2024: €0.63 billion) related to loan interest and charges, and €0.08 billion (2024: €0.37 billion) relate to the repayment of domestic loans.
In addition, social security expenditure until the end of November amounted to €1.70 billion (2024: €1.65 billion), representing an increase of €0.05 billion (3%), mainly due to the increase in the subsidy to the Renewable Energy Sources Fund of €0.03 billion (2025: €0.04 billion, 2024: €0.01 billion), the increase in health benefits by €0.05 billion (2025: €0.74 billion, 2024: €0.69 billion) and a decrease in social welfare benefits of €0.02 billion (2025: €0.62 billion, 2024: €0.64 billion).
Furthermore, transfers and subsidies until the end of November amounted to €1.63 billion (2024: €1.49 billion), representing an increase of €0.14 billion (9%) compared to the same period last year, mainly due to an increase in grants to municipalities of €0.06 billion (2025: €0.11 billion, 2024: €0.05 billion), the gross national income-based own resource by €0.04 billion. (2025: €0.20 billion, 2024: €0.16 billion) and the General Government Contribution to the Social Security Fund by €0.05 billion (2025: €0.61 billion, 2024: €0.56 billion).
Operating and other expenses
Operating and other expenses up to the end of November amounted to €0.83 billion (2024: €0.90 billion), representing a decrease of €0.07 billion (8%).
The Treasury noted that over the last decade, the average implementation of the state budget for total expenditure up to November stood at 73%, with the lowest implementation rate for 2018 mainly due to the timing of public debt payments, while the implementation rate for 2025 stands at 74%.
Subsequently, with regard to the implementation of the State Budget for development expenditure, it is stated that the implementation of capital expenditure until the end of November amounted to €326.7 million and is mainly due to expenditure on the road network, amounting to €74.9 million, expenditure on construction projects, amounting to €51.1 million, expenditure on the construction, expansion and improvements to government buildings, amounting to €34.1 million, expenditure on sewerage and water systems, amounting to €29.4 million, expenditure on the purchase of land and buildings, amounting to €26.5 million, expenditure on the construction, extension, and improvement of school buildings, amounting to €25.5 million, expenditure on the purchase of fixed and mobile machinery, amounting to €14.9 million, expenditure on the purchase of other assets, amounting to €14.5 million, and expenditure on the purchase of equipment, amounting to €10.0 million.
Accordingly, the implementation of co-financed and other financial expenditures by the end of November amounted to €190.4 million and is mainly due to co-financed projects implemented by non-governmental agencies, amounting to €55.7 million, the plan to subsidise tuition and meals for children up to 4 years of age, amounting to €18.4 million, projects co-financed by Internal Affairs Funds, amounting to €13.2 million, the state contribution to the Cyprus Agricultural Payments Organisation Payment Fund, amounting to €12.0 million, the "Saving - Upgrading Houses" Programme, amounting to €11.7 million, the Industry and Technology Service's grant schemes, amounting to €9.5 million, the Sustainable Urban Mobility Promotion Plan, amounting to €7.3 million, co-financed construction projects, amounting to €7.1 million, European Competitiveness Programs, amounting to €6.9 million, the New Business Activity Support Plan, amounting to €5.8 million, actions to address skills mismatches/new evaluation system/digital transformation, amounting to €4.0 million, and the Competitiveness Plan for Small and Medium-sized Enterprises, amounting to €3.9 million.
Sponsorships, contributions, and grants
In the category of sponsorships, contributions, and grants, implementation by the end of November amounted to €203.8 million, mainly due to the sponsorship of the University of Cyprus, amounting to €109.7 million, the sponsorship of the Cyprus University of Technology, amounting to €57.9 million, the €8.6 million sponsorship to the Open University of Cyprus, and the €6.5 million sponsorship to the Cyprus Institute of Neurology and Genetics.
Finally, social benefits amounted to €90.2 million by the end of November, mainly due to the €44.5 million grant to the Renewable Energy Sources Fund, grants to voluntary organisations, amounting to €14.9 million, the state scholarship program, amounting to €13.2 million, cultural benefits, amounting to €9.0 million, student welfare subsidies, amounting to €2.8 million, and housing benefits, amounting to €2.7 million.
Over the last decade, the average implementation of the state budget for development expenditure by the end of November was 50%, with the implementation rate for 2025 reaching 56%, of which 2% is due to a reduction in the initial budget by €67.1 million, the report concluded.
(Source: CNA)
