Cyprus government submits 2027 state budget to parliament

Finance Minister Makis Keravnos presented the 2027 state budget to the House Finance Committee on Monday. The proposed fiscal framework outlines total expenditures of €14.4 billion, rising from €13.7 billion in 2026. Key government priorities include a €820 million allocation for social welfare, €1.066 billion for healthcare, and €235 million for education. The ministry projects a 4% fiscal surplus and a reduction of public debt to 45.2% of GDP by the end of 2027, with economic growth estimated at 2.9% and inflation expected to moderate to 2.5%.

During the committee session, Central Bank Governor Christodoulos Patsalidis and Fiscal Council President Andreas Charalambous highlighted ongoing risks, including inflationary pressures and the need to control inflexible public spending. The Central Bank noted that while banking liquidity is strong, banks should focus on productive investments rather than consumer financing. The Fiscal Council warned that numerical surpluses do not automatically imply long-term sustainability, urging reform in pensions and public wages.

The parliamentary review process will continue through mid-November, involving audits of all ministry budgets. Following committee discussions, a three-day debate is scheduled for December in the plenary session, where political party leaders will present their positions before the final budget vote.