On Thursday 3 October, the Government of Cyprus presented to Parliament the government budget for the 2025 financial year, with projected total expenditure of €12.9 billion and revenue of €10.3 billion.
Direct and indirect taxes amount to €8.48 billion, or about 80 percent of total revenue.
On the other hand, total spending of €12.93 billion is slightly lower than in 2024, mainly due to lower public debt servicing costs.
Debt servicing costs are forecast to be €2.75 billion, up from €3.38 billion in 2024. Transfers, including social benefits and grants to public entities, are expected to reach €3.99 billion, up 5.3% from 2024. In addition, next year the government's contribution to the national health system (Gesy) will be greater than in 2024.
The balance sheet includes forecasts for various economic indicators, such as GDP growth. GDP is expected to increase by 3.1% in 2025, 3.2% in 2026 and 3.3% in 2027.
The unemployment rate is projected to gradually decline from 5 percent this year to 4.8 percent in 2025, 4.6 percent in 2026 and 4.5 percent in 2027.
The inflation rate, calculated on the basis of the consumer price index, will fluctuate around 2 percent in the period 2025-2027.
Another plus is that the government debt-to-GDP ratio is expected to decline over the next few years, from 69.3% this year to 64.2% in 2025 and 53.5% in 2027.
Source: cyprus-mail.com
