Cyprus budget projects third consecutive surplus in 2027

Nicosia, Cyprus. Finance Minister Makis Keravnos presented the 2027 state budget to House President Annita Demetriou on Thursday, saying it projects a fiscal surplus for the third consecutive year.

Economic projections

Keravnos said the surplus is expected to reach around 4% of gross domestic product in 2027, while public debt is projected to fall to 45.2% of GDP by the end of that year. He forecast economic growth of 2.9%, unemployment of around 3.8% and inflation declining to 2.5%.

He described the budget as balanced and focused on people, saying consistent management of public finances would allow the Christodoulides government to support households and businesses where needed. He called the budget the state’s most important economic policy tool and said fiscal stability was essential at a time when the country needed clear direction.

Geopolitical pressures

Keravnos said the budget was prepared amid negative geopolitical developments in the region and internationally, describing fiscal stability as a shield for the country and its citizens.

Diesel reached €2 per litre this week, while petrol was around €1.68 per litre, following an expansion of the control and actions of Yemen’s Iran-backed Shia Houthi movement. The Houthis now control almost the entire western coast of Yemen, including the eastern half of the Bab al-Mandab strait, and have attacked Saudi Arabia’s east-west oil pipeline.

About 5% of global oil supplies passed through the strait in February, typically heading north towards the Suez Canal and the Mediterranean.