Finance Minister Makis Keravnos has announced that the final deliberation on Cyprus’ 2025 state budget is scheduled to occur in mid-September during a Cabinet meeting. Speaking to the Cyprus News Agency (CNA), Keravnos confirmed that the Finance Ministry has completed the groundwork, including the allocation of funds for each ministry.
He noted that the final refinements to the state budget will be made after his return next week.
Keravnos also touched on the government’s ongoing investment strategy, reiterating that the development programme aimed at bolstering Cyprus’ economic model will continue. This programme emphasizes creating partnerships between local businesses and encouraging collaborations with foreign companies.
“We are working on this initiative, believing it will improve the current account balance, particularly through export-oriented projects,” Keravnos explained.
He further highlighted the government’s commitment to enhancing existing strengths, such as tourism and attracting international businesses, while also looking to expand into new sectors.
In the near term, the minister’s focus is on ensuring the full execution of the Recovery and Resilience Plan. The ministry is preparing to submit the fifth and sixth instalments, with substantial funding anticipated by the end of the year.
Following EU inspections on payment requests for the second, third, and fourth instalments, €229 million is expected to be received.
Keravnos also mentioned that the ministry is working on restructuring the public sector and managing the growth of the state payroll, using a study by the International Monetary Fund (IMF) as a guideline. To ensure more detailed analysis, a request for technical assistance has been submitted to the European Commission.
“This is a long-term issue, but our aim is to control payroll growth,” Keravnos said.
Regarding Cyprus’ economic growth in the second quarter, Keravnos expressed optimism. Preliminary estimates from the Statistical Service showed a real GDP growth of 3.7 percent, up from 3.3 percent in the first quarter. In light of this, the Finance Ministry plans to revise its full-year estimate for 2024, previously set at 2.9 percent.
For 2025, the ministry forecasts a GDP growth of 3.1 percent, although the University of Cyprus’ Economics Research Centre (CypERC) is slightly more optimistic, projecting 3.3 percent.
Additionally, the primary surplus, which excludes debt servicing, is expected to reach €1.42 billion, or 4.3 percent of GDP. The fiscal balance is projected to show a surplus of €936 million, equal to 2.8 percent of GDP.
Source: Cyprus Mail