Newsroom
Cyprus’ state payroll is set to climb again in 2026, with government spending on personnel projected to rise by €153 million despite efforts to rein in hiring.
Finance Ministry figures show payroll costs are budgeted at €3.77 billion next year, up from an estimated €3.62 billion in 2025. That continues a steady climb from €3.55 billion in 2024. Expenditures are forecast to keep growing, hitting €3.90 billion in 2027 and €4 billion in 2028.
Finance Minister Makis Keravnos said the government has built the draft budget to withstand possible adjustments from cost-of-living allowance negotiations without upsetting fiscal stability. He added the ministry has run “dozens of scenarios” to prepare for different outcomes.
“Containing payroll costs remains a constant concern,” Keravnos told reporters after the Cabinet approved the 2026 budget.
While spending is increasing, the government emphasized that public sector headcount is gradually shrinking. The budget provides for the creation of 458 positions, including 60 fire service posts, while abolishing 472, a net cut for the second year in a row.
Employment in the wider public service has dropped by nearly 2,000 workers since 2012, ministry data show, though staff levels in the education sector rose by more than 3,700 over the same period.
The overall 2026 draft budget earmarks €1.57 billion for operating costs, €4.22 billion for transfers, €546 million for co-financed projects, €665 million for interest, €172 million for capital spending, €408 million for works in progress, €2.27 billion for loan repayments, and nearly €80 million for investments.
