Cyprus’s economic outlook remains positive despite a climate of significant uncertainty, Finance Minister Makis Keravnos stated yesterday after submitting the state budget for 2025 to House Speaker Annita Dimitriou.
The 2025 budget, totalling €10.2 billion, projects a surplus of 3.3% and a primary surplus of 4.8%.
Keravnos noted that public debt is expected to decrease to 64.2% in 2025 and further to 58.1% in 2026, with the aim of reducing it below 60%.
All expenditures, including developmental, capital, transfers, and social benefits, have increased, according to the minister.
Addressing current geopolitical developments, Keravnos said the cost cannot be calculated as these processes are ongoing. He emphasised that creating a surplus budget is a preventive measure to address unforeseen consequences and implement social policies.
Regarding the public sector, the 2025 budget shows a reduction of eight permanent positions compared to previous budgets. The cost of public sector wages remains at 28% of the budget, slightly lower than last year.
The minister explained that this is part of efforts to contain the budget, noting that wage cost containment does not mean public sector workers are denied benefits from economic growth.
Instead, structural changes aim to gradually contain this cost in the long term.
Key budget figures include:
- Total state budget expenditure for 2025: €12.934 billion
- Revenue (excluding financial flows): €10.312 billion, a 6.2% increase from 2024
- Expenditure (excluding loan repayments and investments): €11.041 billion, a 3.8% increase from 2024
Direct and indirect taxes are expected to account for 82% of total revenue, amounting to €8.484 billion in 2025.
The budget also projects increases in non-tax revenues and decreases in public debt servicing costs for 2025.
