CNA News

Cabinet to discuss 2025 state budget by mid-September, Finance Minister tells CNA

The Council of Ministers will have its final discussion on the 2025 state budget by mid-September, Finance Minister Makis Keravnos told CNA.

Speaking to CAN, Keravnos said the Ministry has completed all preparations, while the expenditure ceilings for all Ministries have been set, adding that will his return from the summer holidays next week, the final touches on the budget document will be made.

On the government’s investment plan, the Minister said the authorities will continue the implementation of the growth programme aiming at strengthening Cyprus’ economic model, via the promotion of collaboration of Cypriot companies with each other as well as with foreign corporations.

“This is something we are examining and we believe this could improve our current account balance, especially via export-oriented initiatives,” Keravnos added, noting that the strengthening of Cyprus current model should continue where comparative advantages exist, such as tourism and attracting new foreign companies, coupled with exploring new sectors.

With regard to the short-term plan, Keravnos said the aim is to fully implemented the EU-funded Recovery and Resilience Plan amounting to €1.2 billion, adding the Ministry is preparing for the submission of requests for the disbursement of the 5th and 6th tranches, whereas significant disbursements are expected by the end of the year.

According to the Ministry, following the due checks by the EU over Cyprus request for the 2nd and 3rd tranches, along with the request for the 4th disbursement submitted in the beginning of July, disbursements will amount to €229 million.

Furthermore, Keravnos said the Ministry will continue working on the restructuring of the public service and the rationalisation of the state wage bill on the basis of the study submitted by the International Monetary Fund following the government’s request for technical assistance on the matter. The Finance Minister also said that the government has submitted a similar request to the European Commission, as the IMF’s study was “more general,” he said.

“And we want to enter into details. This issue will take time, as our aim is to contain the wage bill’s growth rate,” the Minister added.

Furthermore, invited to comment on the Statistical Service’s flash estimate over a 3.7% real GDP growth in the second quarter of this year, Keravnos welcomed the strengthening of Cyprus’ growth rate, noting “we are doing our utmost to maintain the upward trend amid a fluid international economic environment.”

Following CyStat’s flash estimate, the Finance Ministry said it will upward revise its initial projection over a 2.9% growth rate for 2024.

According to the Ministry’s macroeconomic scenario included in the 2025 – 2028 Strategic Fiscal Policy Framework, Cyprus growth rate next year is estimated at 3.1%. The primary surplus (excluding debt servicing expenditure) is estimated to reach €1.42 billion or 4.3% of GDP, whereas the fiscal balance is projected to show a surplus of €936 million, or 2,8% of GDP.