Developing Cyprus’ domestic defence industry is a priority for the government, Defence Minister Vasilis Palmas said on Friday, arguing that it would both strengthen the National Guard and contribute to economic growth.

Speaking before the House finance committee during a discussion on the defence ministry’s 2027 budget, Palmas said investment in the sector would provide the National Guard with more options to enhance its military capabilities while creating another industry to support the Cypriot economy.

“The benefit is twofold. An industry develops and contributes to the country’s economy, while at the same time we have an industry at our disposal from which we can order products that will technologically enhance the National Guard,” he said.

Palmas added that the domestic defence industry is already developing technological programmes which he described as important and capable of contributing to the National Guard’s armament programmes.

Outlining the ministry’s priorities, Palmas said its mission remained the protection of Cyprus’ territorial integrity and sovereign rights, with available resources directed towards three main areas.

The first focuses on strengthening the National Guard’s deterrent power and military capabilities.

The second concerns environmental protection and improving the National Guard’s operational resilience to the effects of climate change.

The third involves the digital transformation of the defence ministry, including the adoption and use of new technologies.

Meanwhile, acting permanent secretary of the ministry Stelios Kountouris told the committee that total defence expenditure is projected to reach approximately 2.2 per cent of GDP in 2027, falling slightly to 2.11 per cent in 2028. The figures include expenditure under the EU’s Security Action for Europe (Safe) programme.

Spending specifically allocated to strengthening defence capabilities is expected to account for 1.06 per cent of GDP in 2027 and approximately 1 per cent in 2028, compared with 0.73 per cent in 2026.