The implementation of Cyprus’ 2025 state budget reached 87 per cent for revenue and 92 per cent for actual expenditure, according to a Treasury report published on Tuesday.

Total revenues for 2025 amounted to €10.20 billion, representing 87 per cent of the budgeted amount, compared to €10.81 billion and a 96 per cent implementation rate in 2024.

Actual expenditures reached €11.99 billion, which corresponds to an implementation rate of 92 per cent, slightly higher than the 91 per cent recorded in 2024 when spending stood at €12.42 billion.

The Treasury reported that over the last decade, the average implementation rate for total state budget expenditure has remained steady at 91 per cent.

Revenues showed a decrease from the previous year primarily due to a €1.07 billion drop in loan withdrawals, which was partially offset by increases in direct and indirect taxes.

Direct taxes rose by €0.37 billion and indirect taxes increased by €0.17 billion respectively over the course of the year.

The slight reduction in overall expenditure was mainly attributed to a €0.84 billion decrease in loan repayments, combined with higher spending on social benefits and transfers.

Indirect taxes grew by 4 per cent compared to 2024, bolstered by an €0.08 billion increase in VAT receipts which reached €3.16 billion.

Direct taxes saw a 6 per cent increase to reach €3.79 billion, largely driven by a €0.32 billion rise in personal and corporate income tax.

Loan withdrawals for 2025 were limited to €0.10 billion compared to €1.17 billion in 2024, as a planned €1 billion loan was eventually withdrawn in January 2026 instead of December 2025.

Repayments of loans and interest amounted to €2.54 billion, with €1.63 billion dedicated to foreign debt and €0.19 billion to domestic debt.

Expenditure on payroll, pensions, and gratuities remained relatively stable with a marginal decrease, totalling €3.52 billion for the year.

Social benefit spending rose by 5 per cent to reach €2.02 billion, a move the Treasury attributed to an €0.08 billion increase in healthcare benefits.

Transfers and grants saw an 11 per cent increase to €1.93 billion, spurred by higher government contributions to the Social Insurance Fund and increased grants to municipalities.

Operating and other expenses fell by 3 per cent to €1.12 billion, according to the official figures.

Capital expenditure implementation reached €469.3 million, with the largest portions directed towards the road network at €97.3 million and construction projects at €77.4 million.

Significant funds were also allocated to water systems, government building improvements, and school extensions.

Co-financed projects saw an implementation of €336.3 million, including €20.2 million for tuition and feeding subsidies for children under four and €12.8 million for home energy upgrades.

Sponsorships and contributions to academic and research institutions totalled €245.9 million, including €118.2 million for the University of Cyprus.

The Treasury highlighted that development expenditure implementation reached 81 per cent in 2025, significantly higher than the ten-year average of 69 per cent.

The average implementation of the state budget for total expenditure stood at 91 per cent over the last decade, the Treasury stated.