Implementation of development expenditure at 1% in January

The implementation rate of development expenditure from the state budget stood at 1% (€17.86 million) in January, according to the Treasury of the Republic of Cyprus, remaining at the average level of the last decade.

Meanwhile, implementation concerning revenues remained at the same level as January last year, at 8%, but showed a decrease compared to expenditures, which stood at 4%, down from 6% in January 2023.

The Treasury reported that by the end of January 2024, total revenues amounted to €0.88 billion, corresponding to 8% of the state budget (2023: €0.8 billion, 8%), while actual expenditures amounted to €0.55 billion, representing an implementation rate of 4% (2023: €0.78 billion, 6%).

The implementation of the state budget concerning revenues remained at the same level as the corresponding period last year (2024: 8%, 2023: 8%), while it showed a decrease compared to expenditures (2024: 4%, 2023: 6%).

The Treasury noted that the decreased implementation concerning expenditures is due to reduced outflows for loan repayments and interest payments (2024: €0.05 billion, 2023: €0.28 billion).

Development expenditures in focus

According to the Treasury, the implementation of capital expenditures in January 2024 reached €5.9 billion. This was primarily attributed to investments in road infrastructure amounting to €3.4 billion and expenditures for the construction, expansion, and improvement of school buildings totaling €1.9 billion.

Additionally, implementation for co-funded and other financial expenses in January 2024 amounted to €3.2 billion. This was mainly due to the “Tuition and Child Nutrition Subsidy Scheme”, accounting for €1.6 billion, grants for Small and Medium-sized Enterprises competitiveness enhancement at €0.3 billion, “Savings - Home Upgrading” scheme at €0.2 billion, and incentive scheme for Unemployed at €0.2 billion.

The implementation for grants, contributions, and subsidies until the end of January 2024 reached €7 billion. This was primarily driven by grants to semi-governmental organizations amounting to €4.6 billion and the state's contribution to the European Peace Facility totaling €1.1 billion, the European Investment Bank at €0.6 billion, and the European Development Fund at €0.1 billion.

The implementation of social benefits by the end of January 2024 amounted to €1.1 billion. This was mainly due to grants to non-governmental Organizations totaling €0.7 billion and expenditures for Cultural provisions at €0.4 billion.

The implementation of social benefits by the end of January 2024 amounted to €1.1 billion. This was mainly due to grants to Volunteer Organizations totaling €0.7 billion and expenditures for cultural provisions at €0.4 billion.

Revenue and Expenses overview

In January 2024, there were notable changes in revenue and expenses compared to the previous year. According to the press release, indirect taxes decreased by €0.01 billion (5%) primarily due to a reduction in VAT income by €0.02 billion (2024: €0.24 billion, 2023: €0.26 billion). On the other hand, direct taxes increased by €0.12 billion (28%) from the previous year, mainly due to income tax from both legal and natural persons (2024: €0.51 billion, 2023: €0.40 billion). However, there were no loan withdrawals by the end of January, both in 2024 and 2023.

Regarding the implementation of the state budget relative to expenses, there was a 9% increase (€0.02 billion) in expenditures related to salaries, pensions, and gratuities, rising from €0.23 billion in 2023 to €0.25 billion in 2024. Loan repayments and interest amounted to €0.05 billion (2023: €0.28 billion), with €0.04 billion (2023: €0.05 billion) attributed to loan interest and charges, and €0.01 billion (2023: €0.23 billion) to internal loan repayments.

Furthermore, expenses on social benefits in January 2024 totaled €0.08 billion, remaining unchanged from the previous year (2023: €0.08 billion).