The Council of Ministers is scheduled to convene today to give its approval for the state budget for the year 2024. This budget marks the inaugural fiscal plan under the leadership of President Christodoulides.
Finance Minister Makis Keravnos has communicated to Cyprus News Agency (CNA) that the forthcoming year’s budget will be geared towards fostering economic growth, supporting investments, and advancing projects integrated into Cyprus’ Recovery and Resilience Plan. It will also focus on managing the public sector wage bill and employment levels while aiming to achieve a surplus, all within the framework of ensuring sustainable growth and adhering to the country’s obligations within the European Union.
In light of ongoing interest rate hikes by the European Central Bank and the persistent uncertainty stemming from the ongoing conflict in Ukraine, the Finance Ministry has revised its growth projections. The growth rate for the current year has been adjusted downward from the initial estimate of 2.8% of GDP to 2.6%. For 2024, the growth projection has been revised to 2.9% from the previous 3%.
In accordance with the Strategic Framework for Fiscal Policy 2024 – 2026, which establishes expenditure limits based on the government’s policy statement, the fiscal balance for 2024 is anticipated to yield a surplus of €714 million, equivalent to 2.3% of GDP. The primary surplus, excluding debt servicing expenditures, is estimated to reach €1.1 billion, representing 3.7% of GDP. Furthermore, Cyprus’ public debt is anticipated to decline to 73% of GDP by the conclusion of 2024, following a projected reduction to 81% of GDP by the end of 2023.
The set primary expenditure ceiling for the Central Government, including Ministries, Deputy Ministries, Independent Services, and the Parliament, stands at €9.38 billion for the fiscal year 2024.