Debate on the 2021 state budget will begin on Monday at the House finance committee.
Finance Minister Constantinos Petrides will brief MPs on the course of public finances, during a particularly difficult period due to the challenges of the Covid-19 pandemic, but also amid controversy surrounding the citizenship by investment scheme.
The minister will analyse state revenues, fiscal indicators, economic policy and the fiscal situation in Cyprus.
The budget for 2021 is €609 million or 8.7 per cent more than last year as the government seeks to enhance the budget’s social dimension, including emergency measures in 2021 to support vulnerable groups, employees and companies, but also to strengthen its growth aspect. This, the minister said, is an “emergency” budget.
The ministry of finance forecasts a budget deficit for the period 2020-23 and an increase in public debt as a percentage of GDP in 2020, due to the new economic conditions.
The government budget for 2021 predicts revenues of €8,861,318,757 and primary expenditures (excluding loan repayments and interest expenses) of €7,609,847,339, with the primary balance amounting to €1,251,471,418.
According to the data of the ministry of finance, the budget and the Medium-Term Fiscal Framework (MTF) 2021-2023 were prepared under very difficult conditions.
The ministry has pointed out that due to the fact that public debt as a percentage of GDP remains high it becomes absolutely necessary to maintain the ceilings as formulated in the 2021 budget bill and the 2021-2023 MTF.
In the three-year period of 2021-2023, an amount of €3,200 million is expected to be spent on development projects, €4,907.4 million on social benefits, €240 million on e-government projects and €565.4 million for business support (implementation of projects).
The main categories of expenditure in the 2021 budget concern personnel expenditure of €2,946 million (27.9 per cent), operating expenditure of €896 million (8.5 per cent), transfers of €2,982 million (28.2 per cent) and loans amounting to €2,426 million (23 per cent).