Development budget implementation rate at 22% at end-June

The implementation rate of the annual state budget’s development expenditure reached 22% at the end of June, (21% is the average of the last decade until June), reaching €323,498,228, out of the total development costs of €1,489,204,940.

The Treasury of the Republic of Cyprus said that at the end of June, total revenue amounted to €4.89b, which corresponds to 43% of the state budget (2023: €4.70b, 48%) while actual expenditure amounted to €5.65b, which corresponds to an implementation rate of 43% (2023: €4.36b, 36%).

The implementation of the state budget, in terms of revenue, showed a decrease compared to the corresponding period last year (2024: 43%, 2023: 48%), mainly due to a decrease in the percentage of implementation of the indirect taxes budget (2024: 45%, 2023: 51%).

Compared to the corresponding period last year, there is an increase in the implementation of the state budget in relation to expenditure (2024: 43%, 2023: 36%), mainly due to increased outflows from the EMTN repayment (2024: €1.02b, 2023: €0). It is noted that the state budget, which is prepared on a cash basis, shows for the year 2024 an increase in revenue by 16% (2024: €11.28b, 2023: €9.77b) and an increase in expenses of 9% (2024: €13.1b, 2023: €12b).

The increase in revenue is mainly due to an increase in indirect and direct taxes by €0.68b and €0.61b, respectively, while the increase in expenditure is mainly attributed to the increase in loan and interest repayments, and payroll, pensions and gratuities by €0.77b and €0.35b, respectively.

Indirect taxes increased by €0.07b (4%), compared to 2023, mainly due to the increase in VAT revenue by €0.06b (2024: €1.46b, 2023: €1.40b). Direct taxes increased by €0.20b (20%) compared to 2023, mainly due to an increase in the Income Tax of Legal and Natural Persons (2024: €1.24b, 2023: €1b). By the end of June, borrowing decreased by €0.05b (2024: €1.03b, 2023: €1.08b).

As regards expenditure related to payroll, pensions, gratuities, the implementation at the end of June shows an increase of 5% (€0.07b) from €1.46b in 2023 to €1.53b in 2024.

The repayments until the end of June amounted to €1.84b (2023: €0.65b), of which €1.06b (2023: €0.33b) concern the repayment of foreign loans, the € 0.46b (2023: €0.36b) of borrowing interest and charges and €0.32b (2023: €0.26b) repayment of domestic loans.

Social benefits expenditure until the end of June amounted to €0.90b (2023: €0.82b). The increase of €0.08b (10%) is due to the increased expenditure on social welfare benefits by €0.05b (2024: €0.40b, 2023: €0.35b) and the increased expenditure on health by €0.03b (2024: €0.36b, 2023: €0.33b).

Moreover, it says that the implementation of development expenditure until June amounted to €126.5m and is mainly due to the cost for the road network, amounting to €45.6m, the cost for construction projects, amounting to €17m, the expenses for the construction, expansion and improvements of school buildings, amounting to €13.5m, the expenses for the purchase of land and buildings, amounting to €13m, the expenses for sewerage and water systems, amounting to €10.2m, the expenses for the purchase of machinery, amounting to €7.6m, and the expenses for the purchase of equipment, amounting to €6.8m.