Cyprus recorded robust revenue growth in the first five months of 2025, while keeping a steady grip on government spending, according to data from the Treasury of the Republic.
From January to May 2025, total government income reached €3.61 billion, marking an 8% rise compared to the same period in 2024 (€3.33 billion). This jump is largely thanks to a €140 million surge in direct tax collections and a €70 million increase in indirect taxes. Overall, revenues now account for 31% of the yearly budget, slightly ahead of the 30% recorded at the same point last year.
Spending during the same period stood at €3.62 billion, representing 28% of the total budget—again slightly higher than last year’s 27%. Most of this was due to a 7% rise in the public sector payroll, which totaled €1.36 billion.
Breaking down the tax gains:
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Indirect taxes rose by 4%, primarily from increased VAT and other consumption-based taxes.
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Direct taxes jumped 11%, fueled by higher income tax contributions from both individuals and corporations.
On the spending side:
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Social benefits rose by 3%, mainly due to increased healthcare expenditures.
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Transfers and subsidies were up 13%, linked to higher payments into the Social Insurance Fund and more funding to local governments.
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Loan and interest repayments significantly dropped to €270 million from €530 million in 2024.
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Operational and miscellaneous expenses fell by 9%.
The overall budget execution—28% of the final forecast—is consistent with Cyprus’s long-term average, excluding the unusual spending patterns seen from 2020–2022 due to pandemic-related debt repayments.
On the development front, the government had spent €304 million by the end of May, exceeding the ten-year average and representing 20% of the annual development budget. Of that:
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€116 million went to capital investments, including €31.5 million on roads and additional funds for state buildings and schools.
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€72 million was directed to EU co-financed projects like the “Save – Upgrade Homes” program and entrepreneurship initiatives.
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€81.5 million in grants supported public universities and research institutions, with major portions going to the University of Cyprus (€46.2 million) and the Cyprus University of Technology (€25.6 million).
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€27.3 million was paid out in social welfare benefits.
All in all, the figures show strong fiscal performance backed by healthy tax inflows and a balanced approach to spending.
Source: Stockwatch.com.cy