Cyprus: Development Spending Up 24% in First Half of 2025

The implementation rate of development spending in the state budget increased to 24% in the first half of 2025, according to the Republic's General Accounting Office (GAO). This compares to 22% in the corresponding period of 2024 and 21% for the annual average of the last decade.

Total development spending for the year amounts to €1.55 billion, with €370.82 million implemented by the end of June, compared to €323.49 million the previous year.

Revenues amounted to €4.23 billion (36% of the budget) and expenditures to €4.51 billion (35%) by the end of June 2025. A decrease in the implementation of revenues and expenditures is observed compared to 2024, mainly due to reduced borrowing and loan repayments.

The state budget for 2025 shows an increase in revenues of 4% and a decrease in expenditures of 5%. The increase in revenue is mainly due to the rise in direct and indirect taxes, while the decrease in expenditure is mainly due to reduced loan repayments.

Indirect taxes increased by €0.08 billion (4%), while direct taxes increased by €0.18 billion (13%). Spending on payroll, pensions and gratuities increased by 7% (€0.10 billion).

The implementation of capital expenditures amounted to €148.3 million, mainly for road networks and construction projects. Co-financed expenditures amounted to €92.0 million, while grants, contributions and subsidies amounted to €89.2 million, mainly to universities.