The Treasury has announced that the execution of the state budget for the first 11 months of 2025 showed a decline in revenues compared with last year, while spending execution recorded a slight increase, providing insight into fiscal developments and cash-flow dynamics.
Presenting the budget execution report for the period from January 1 to November 30, 2025, the Treasury said the state budget, prepared on a cash basis, projected a 4 per cent increase in revenues for 2025 to €11.75 billion, compared with €11.28 billion in 2024.
The report added that projected expenditure fell by 4 per cent to €13.01 billion in 2025, compared with €13.60 billion a year earlier.
It said the expected rise in revenues was mainly due to higher direct taxes of €0.27 billion and indirect taxes of €0.17 billion, while the projected reduction in expenditure stemmed largely from lower loan repayments of €0.76 billion, partly offset by increased social benefits spending of €0.15 billion.
Regarding actual execution, the Treasury said that by the end of November 2025, state revenues amounted to €8.60 billion, corresponding to 73 per cent of the annual budget, compared with €9.20 billion or 82 per cent in the same period of 2024.
Actual expenditure reached €9.59 billion, representing 74 per cent of the annual budget, compared with €9.65 billion or 71 per cent a year earlier.
The Treasury said revenue execution was lower than last year, falling to 73 per cent from 82 per cent, mainly due to a reduction in loan drawdowns of €1.05 billion, which was partly offset by increases in direct taxes of €0.17 billion and indirect taxes of €0.14 billion.
By contrast, expenditure execution rose slightly to 74 per cent from 71 per cent, largely due to higher transfers and grants of €0.14 billion.
Looking at revenue composition, the report said indirect taxes rose by €0.14 billion, or 4 per cent, compared with 2024.
This increase was mainly driven by higher VAT revenues of €0.07 billion, reaching €2.92 billion in 2025 from €2.85 billion in 2024.
Revenues from other indirect taxes increased by €0.04 billion to €0.49 billion, while consumption taxes rose by €0.03 billion to €0.49 billion.
Direct taxes increased by €0.17 billion, or 6 per cent, mainly due to higher corporate and personal income tax receipts of €0.13 billion, reaching €2.92 billion in 2025 from €2.79 billion in 2024.
Loan drawdowns by the end of November 2025 stood at just €0.09 billion, compared with €1.14 billion in the same period of 2024.
On the expenditure side, execution in the category of wages, pensions and gratuities showed a slight decline of €0.03 billion, falling to €3.01 billion from €3.04 billion a year earlier.
Loan and interest repayments amounted to €1.87 billion, compared with €2.06 billion in 2024.
Of this total, €1.23 billion related to external loan repayments, compared with €1.07 billion in 2024, while interest and related charges reached €0.56 billion, down from €0.63 billion.
Repayments of domestic loans fell sharply to €0.08 billion, compared with €0.37 billion in the previous year.
Social benefits spending rose to €1.70 billion by the end of November, up from €1.65 billion in 2024, marking an increase of €0.05 billion or 3 per cent.
This rise was mainly due to higher grants to the Renewable Energy Sources Fund of €0.03 billion, increased health benefits of €0.05 billion, and a reduction in social welfare benefits of €0.02 billion.
Transfers and grants climbed to €1.63 billion, up from €1.49 billion, reflecting an increase of €0.14 billion or 9 per cent.
This was driven mainly by higher grants to municipalities of €0.06 billion, an increase in the gross national income own resource contribution of €0.04 billion, and a rise in the general government contribution to the Social Insurance Fund of €0.05 billion.
Operational and other expenditure declined to €0.83 billion from €0.90 billion, representing a reduction of €0.07 billion or 8 per cent.
Moreover, the Treasury said that over the past decade, average execution of total state expenditure by November stood at 73 per cent, with the lowest level recorded in 2018 due mainly to the timing of public debt payments.
For 2025, execution of total expenditure reached 74 per cent, slightly above the long-term average.
Turning to development expenditure, the report said execution of capital spending reached €326.7 million by the end of November.
This was mainly due to spending on the road network of €74.9 million, construction projects of €51.1 million, government buildings of €34.1 million, sewerage and water systems of €29.4 million, land and building purchases of €26.5 million, school buildings of €25.5 million, machinery of €14.9 million, other assets of €14.5 million, and equipment purchases of €10.0 million.
Execution of co-financed and other financing expenditure reached €190.4 million.
This was mainly linked to co-financed projects by non-governmental services of €55.7 million, reflecting continued implementation of externally supported programmes.
It also included spending on the childcare and feeding subsidy scheme for children up to 4 years of €18.4 million, internal affairs funds projects of €13.2 million, the state contribution to the CAP Payments Fund of €12.0 million, and the Save and Upgrade Homes scheme of €11.7 million.
Additional expenditure related to industry and technology grant schemes of €9.5 million, the sustainable urban mobility promotion scheme of €7.3 million, co-financed construction projects of €7.1 million, European competitive programmes of €6.9 million, the new business activity support scheme of €5.8 million, skills mismatch and digital transformation actions of €4.0 million, and the SME competitiveness scheme of €3.9 million.
In the category of grants, contributions and subsidies, execution reached €203.8 million.
This mainly reflected grants to the University of Cyprus of €109.7 million, the Cyprus University of Technology of €57.9 million, the Open University of Cyprus of €8.6 million, and the Cyprus Institute of Neurology and Genetics of €6.5 million.
Execution of social benefits within development expenditure amounted to €90.2 million.
This was mainly due to grants to the Renewable Energy Sources Fund of €44.5 million, grants to voluntary organisations of €14.9 million, the state scholarships programme of €13.2 million, cultural benefits of €9.0 million, student welfare grants of €2.8 million, and housing benefits of €2.7 million.
Over the past decade, average execution of development expenditure by the end of November stood at 50 per cent, while execution in 2025 reached 56 per cent, of which 2 per cent was attributed to a €67.1 million reduction in the original budget, the report concluded.
