Nicosia, Cyprus. Cyprus implemented 25 per cent of its 2026 development budget during the first half of the year, matching the pace recorded in the corresponding period of 2025. The rate was above the 22 per cent average recorded over the past decade, according to the state treasury.
Development budget implementation
Total development expenditure budgeted for 2026 stands at €1.62 billion, with €412.39 million implemented by the end of June.
Revenue and expenditure
State revenue reached €4.44 billion, equivalent to 41 per cent of the annual target, compared with €4.21 billion and the same implementation rate in the first half of 2025.
Actual expenditure rose to €4.63 billion, representing 40 per cent of the annual budget, from €4.41 billion and 40 per cent during the same period last year.
Higher tax receipts were the main driver of revenue growth, with indirect taxes increasing by €170 million and direct taxes by €90 million.
The rise in expenditure was largely due to increases of €110 million in transfers and grants, €80 million in operating and other expenses, and €50 million in social benefits.
Debt-related flows
Loan drawdowns and repayments received by the state totalled €1.25 billion, compared with €30 million a year earlier.
Outflows related to debt repayments and the issuance of loans reached €2.09 billion, up from €110 million in 2025.
Annual budget outlook
The cash-based 2026 state budget provides for revenue of €10.78 billion, a 5 per cent increase from €10.31 billion last year, while expenditure is expected to rise by 3 per cent to €11.44 billion from €11.13 billion.
The projected revenue increase is mainly linked to an additional €130 million in direct taxes and €330 million in grants. The expected rise in expenditure largely reflects a €360 million increase in operating costs.
