The implementation of the State Budget in relation to revenue during the first 11 months of 2025 recorded a decrease compared to the corresponding period last year, while, on the contrary, there was a slight increase in the implementation of the state budget in relation to expenditure, as announced on Tuesday by the Treasury of the Republic.
Presenting the results of the State Budget implementation report for the period from January 1 to November 30, 2025, the Treasury stated that the State Budget, which is prepared on a cash basis, shows a 4% increase in revenue for the year 2025 (2025: pound 11.75 billion, 2024: pound 11.28 billion) and a 4% decrease in expenditure (2025: pound 13.01 billion, 2024: pound 13.60 billion).
It is added that the projected increase in revenue is mainly due to a rise in direct and indirect taxes of pound 0.27 billion and pound 0.17 billion, respectively, while the projected reduction in expenditure is mainly due to lower loan repayments of pound 0.76 billion, combined with increased social benefit expenditure of pound 0.15 billion.
Regarding the implementation of the State Budget, it is noted that at the end of November 2025 revenues amounted to pound 8.60 billion, which corresponds to 73% of the state budget (2024: pound 9.20 billion, 82%), and actual expenditure amounted to pound 9.59 billion, corresponding to a 74% implementation (2024: pound 9.65 billion, 71%).
It is also noted that the implementation of the State Budget in relation to revenue shows a decrease from the corresponding period last year (2025: 73%, 2024: 82%), mainly due to a pound 1.05 billion decrease in borrowing, which is offset by an increase in direct and indirect taxes of pound 0.17 billion and pound 0.14 billion, respectively, while the implementation of the state budget in relation to expenditure shows a slight increase (2025: 74%, 2024: 71%), mainly due to an increase in transfers and subsidies of pound 0.14 billion.
In particular, with regard to state revenues, it is reported that indirect taxes increased by pound 0.14 billion (4%) compared to 2024, mainly due to an increase in VAT revenues of pound 0.07 billion (2025: pound 2.92 billion, 2024: pound 2.85 billion), revenue from other indirect taxes by pound 0.04 billion (2025: pound 0.49 billion, 2024: pound 0.45 billion) and excise duty revenue by pound 0.03 billion (2025: pound 0.49 billion, 2024: pound 0.46 billion).
Similarly, direct taxes increased by pound 0.17 billion (6%) compared to 2024, mainly due to an increase in corporate and personal income tax of pound 0.13 billion (2025: pound 2.92 billion, 2024: pound 2.79 billion). Also, by the end of November 2025, loan withdrawals amounted to pound 0.09 billion (2024: pound 1.14 billion).
Regarding the implementation of the State Budget for total expenditure, for the category of salaries, pensions, and gratuities, the implementation at the end of November shows a slight decrease of pound 0.03 billion, from pound 3.04 billion in 2024 to pound 3.01 billion in 2025.
In addition, loan and interest repayments up to the end of November amounted to pound 1.87 billion (2024: pound 2.06 billion), of which pound 1.23 billion (2024: pound 1.07 billion) relates to the repayment of external loans, pound 0.56 billion (2024: pound 0.63 billion) related to loan interest and charges, and pound 0.08 billion (2024: pound 0.37 billion) relate to the repayment of domestic loans.
In addition, social security expenditure until the end of November amounted to pound 1.70 billion (2024: pound 1.65 billion), representing an increase of pound 0.05 billion (3%), mainly due to the increase in the subsidy to the Renewable Energy Sources Fund of pound 0.03 billion (2025: pound 0.04 billion, 2024: pound 0.01 billion), the increase in health benefits by pound 0.05 billion (2025: pound 0.74 billion, 2024: pound 0.69 billion) and a decrease in social welfare benefits of pound 0.02 billion (2025: pound 0.62 billion, 2024: pound 0.64 billion).
Furthermore, transfers and subsidies until the end of November amounted to pound 1.63 billion (2024: pound 1.49 billion), representing an increase of pound 0.14 billion (9%) compared to the same period last year, mainly due to an increase in grants to municipalities of pound 0.06 billion (2025: pound 0.11 billion, 2024: pound 0.05 billion), the gross national income-based own resource by pound 0.04 billion. (2025: pound 0.20 billion, 2024: pound 0.16 billion) and the General Government Contribution to the Social Security Fund by pound 0.05 billion (2025: pound 0.61 billion, 2024: pound 0.56 billion).
Operating and other expenses up to the end of November amounted to pound 0.83 billion (2024: pound 0.90 billion), representing a decrease of pound 0.07 billion (8%).
The Treasury noted that over the last decade, the average implementation of the state budget for total expenditure up to November stood at 73%, with the lowest implementation rate for 2018 mainly due to the timing of public debt payments, while the implementation rate for 2025 stands at 74%.
Subsequently, with regard to the implementation of the State Budget for development expenditure, it is stated that the implementation of capital expenditure until the end of November amounted to pound 326.7 million and is mainly due to expenditure on the road network, amounting to pound 74.9 million, expenditure on construction projects, amounting to pound 51.1 million, expenditure on the construction, expansion and improvements to government buildings, amounting to pound 34.1 million, expenditure on sewerage and water systems, amounting to pound 29.4 million, expenditure on the purchase of land and buildings, amounting to pound 26.5 million, expenditure on the construction, extension, and improvement of school buildings, amounting to pound 25.5 million, expenditure on the purchase of fixed and mobile machinery, amounting to pound 14.9 million, expenditure on the purchase of other assets, amounting to pound 14.5 million, and expenditure on the purchase of equipment, amounting to pound 10.0 million.
Accordingly, the implementation of co-financed and other financial expenditures by the end of November amounted to pound 190.4 million and is mainly due to co-financed projects implemented by non-governmental agencies, amounting to pound 55.7 million, the plan to subsidize tuition and meals for children up to 4 years of age, amounting to pound 18.4 million, projects co-financed by Internal Affairs Funds, amounting to pound 13.2 million, the state contribution to the Cyprus Agricultural Payments Organisation Payment Fund, amounting to pound 12.0 million, the “Saving – Upgrading Houses” Programme, amounting to pound 11.7 million, the Industry and Technology Service’s grant schemes, amounting to pound 9.5 million, the Sustainable Urban Mobility Promotion Plan, amounting to pound 7.3 million, co-financed construction projects, amounting to pound 7.1 million, European Competitiveness Programs, amounting to pound 6.9 million, the New Business Activity Support Plan, amounting to pound 5.8 million, actions to address skills mismatches/new evaluation system/digital transformation, amounting to pound 4.0 million, and the Competitiveness Plan for Small and Medium-sized Enterprises, amounting to pound 3.9 million.
In the category of sponsorships, contributions, and grants, implementation by the end of November amounted to pound 203.8 million, mainly due to the sponsorship of the University of Cyprus, amounting to pound 109.7 million, the sponsorship of the Cyprus University of Technology, amounting to pound 57.9 million, the pound 8.6 million sponsorship to the Open University of Cyprus, and the pound 6.5 million sponsorship to the Cyprus Institute of Neurology and Genetics.
Finally, social benefits amounted to pound 90.2 million by the end of November, mainly due to the pound 44.5 million grant to the Renewable Energy Sources Fund, grants to voluntary organizations, amounting to pound 14.9 million, the state scholarship program, amounting to pound 13.2 million, cultural benefits, amounting to pound 9.0 million, student welfare subsidies, amounting to pound 2.8 million, and housing benefits, amounting to pound 2.7 million.
Over the last decade, the average implementation of the state budget for development expenditure by the end of November was 50%, with the implementation rate for 2025 reaching 56%, of which 2% is due to a reduction in the initial budget by pound 67.1 million, the report concluded.