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Cyprus is on track to achieve a fiscal surplus of €1.13 billion in 2025, amounting to 3.3% of GDP, according to the state budget presented to the House of Representatives on Thursday. The budget predicts a 6.2% rise in revenues and a slight 1.2% drop in expenditures compared to 2024.
This surplus signals a positive step for the country's economic health, meaning Cyprus will generate more revenue than it spends. For citizens, this could translate into greater fiscal stability, potential tax relief, and increased public investment in services like healthcare, education, and infrastructure. The government’s commitment to reducing debt also suggests that Cyprus is taking steps to prevent future financial crises.
However, some challenges remain. The slight reduction in spending could impact certain public services, as operational expenses such as defense, policing, and consulting are rising significantly. Although social benefits and healthcare contributions are set to increase, other areas might face tighter budgets, which could affect lower-income citizens relying on public assistance. Additionally, the focus on debt reduction may limit the government's flexibility to respond to unexpected crises or invest in new projects.
In the long run, maintaining a surplus could help Cyprus bolster its economic resilience, but careful management will be needed to ensure that this fiscal strategy benefits all citizens equally.
[With info from CNA]
