By the end of July, the implementation of the state budget had reached 50% in terms of revenue and 47% in terms of expenditures. According to the General Accounting Office, at the end of July 2026, both actual revenue and expenditures totaled €5.43 billion, representing an equal level of execution in absolute terms.
Compared to the corresponding period in 2025, revenue increased by €0.26 billion, mainly due to higher collections from indirect and direct taxes, by €0.16 billion and €0.15 billion, respectively.
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The €0.26 billion increase in expenditures is mainly attributable to higher operating expenses (€0.11 billion), transfers and subsidies (€0.09 billion), and social benefits (€0.08 billion).
Loan inflows amounted to €1.31 billion (2025: €0.06 billion), while loan outflows totaled €2.10 billion (2025: €0.13 billion).
Indirect taxes increased by a net €0.16 billion (7%) compared to 2025, mainly due to a €0.20 billion increase in VAT revenue (2026: €1.98 billion, 2025: €1.78 billion).
Similarly, Direct Taxes increased by a net €0.15 billion (8%) compared to 2025, due to an increase in corporate and personal income tax of €0.16 billion (2026: €1.95 billion, 2025: €1.79 billion).
Expenditures
With regard to expenditures, over the past decade, the average execution rate of the state budget’s total expenditures through the end of July stood at 47%, as it did in 2026.
Expenditures on payroll, pensions, and bonuses showed a slight decrease compared to the same period last year (2026: €1.90 billion, €1.91 billion in 2025).
Expenditures on social benefits through the end of July 2026 totaled €1.13 billion, compared to €1.06 billion in 2025. As noted by the General Accounting Office, the increase of €0.07 billion (7%) is mainly due to higher spending on health benefits by €0.03 billion, education and housing benefits by €0.02 billion, and social welfare benefits by €0.01 billion.
Transfers and grants through the end of July 2026 totaled €1.13 billion (2025: €1.05 billion), representing an increase of €0.8 billion (8%) compared to 2025, mainly due to the €0.06 billion increase in the own-source gross national income (2026: €0.19 billion, 2025: €0.13 billion) and an increase in the General Government Contribution to the Social Security Fund by €0.02 billion (2026: €0.41 billion, 2025: €0.39 billion).
In addition, actual expenditures for operating and other expenses through the end of July 2026 amounted to €0.53 billion (2025: €0.41 billion). The increase of approximately €0.12 billion is mainly due to a rise in defense and law enforcement expenditures by €0.04 billion (2026: €0.16 billion, 2025: €0.12 billion), to the increase in operating expenses by €0.03 billion (2026: €0.18 billion, 2025: €0.15 billion) and an increase in expenditures for consulting services and research by €0.02 billion (2026: €0.06 billion, 2025: €0.04 billion).
Financing Expenses
By the end of July 2026, financing expenses—including interest payable and other expenses—totaled €0.43 billion (2025: €0.44 billion).
Loan Drawdowns and Repayments of Outstanding Loans as of the end of July 2026 totaled €1.32 billion (2025: €0.06 billion). As noted, the increase observed compared to the corresponding period last year is due to the timing of the loan drawdown (EMTNs). Loan Repayments and Loans Issued to Third Parties at the end of July 2026 totaled €2.11 billion (2025: €0.13 billion), of which €2.06 billion related to the repayment of external loans (2025: €0.06 billion) and €0.05 billion to the repayment of domestic loans (2025: €0.06 billion).
As for capital expenditures, spending through the end of July 2026 totaled €165.7 million This is mainly attributable to expenditures on the road network, amounting to €35.3 million; expenditures on construction projects, amounting to €30.1 million; and expenditures on the construction, expansion, and improvements to government buildings, amounting to €18.7 million; expenditures for the purchase of equipment, amounting to €15.5 million; expenditures for the purchase of other assets, amounting to €13.2 million; expenditures for the construction, expansion, and improvements to school buildings, amounting to €11.5 million; expenditures for the purchase of land and buildings, amounting to €9.8 million; expenditures for the purchase of fixed and mobile machinery, amounting to €9.3 million, and expenditures for sewer and water systems, amounting to €8 million.
According to the General Accounting Office, budget execution for co-funded projects and other financial expenditures through the end of July 2026 totaled €134.3 million. This is mainly attributable to co-funded projects implemented by non-governmental agencies, amounting to €36.5 million, the Industry and Technology Service Program, amounting to €13.9 million; the Tuition and Meal Subsidy Program for children up to 4 years of age, amounting to €13.6 million; for projects co-financed by Home Affairs Funds, amounting to €13 million, for the “Save – Upgrade Homes” Program, amounting to €6.4 million, the Sustainable Urban Mobility Promotion Program, amounting to €5.8 million, actions to Address Skills Mismatches/ New Evaluation System/Digital Transformation, amounting to €5.7 million; in European Competitiveness Programs, totaling €5.2 million; in the Plan to Promote Electric Mobility, totaling €4.6 million; in co-funded construction projects, amounting to €3.6 million, and in the New Business Activity Support Program, amounting to €3.3 million.
With regard to grants, contributions, and subsidies, disbursements through the end of July 2026 totaled €150 million, primarily due to a grant to the University of Cyprus totaling €93 million, the grant to the Cyprus University of Technology, amounting to €34.4 million, the grant to the Cyprus Institute, amounting to €5.8 million, a grant to the Open University of Cyprus totaling €5.5 million, and a grant to the Cyprus Institute of Neurology and Genetics totaling €4.8 million.
Social benefits provided through the end of July 2026 totaled €29.2 million and were primarily attributable to educational benefits, amounting to €20.7 million, o cultural benefits, amounting to €5.3 million, and housing benefits, amounting to €1.8 million.
According to the General Accounting Office, over the past decade, the average implementation rate of the state budget for development expenditures through July stood at 28%. The implementation rate for 2026 stands at 32%.
