Cyprus budget debate, pension reform updates, and LNG terminal project progress

The Cypriot parliament has commenced discussions on the 2027 state budget, presented by Finance Minister Makis Keravnos. The proposed expenditures reach €14.4 billion, reflecting a 5.1% increase compared to 2026. Projections indicate a 3% economic growth rate for 2027-2029 and a drop in inflation to 2.5% in 2027. Additionally, the government has introduced three amendments to the pension reform bill, aiming to shorten the payment period for pension increases to three years and extend the transition period to 15 years, with a target implementation date of January 1, 2027.

Simultaneously, the energy sector has seen major developments, including the evaluation of eight companies vying for the contract to complete the LNG terminal in Vasiliko. The project, valued at approximately €180 million, is expected to be awarded by summer 2027. In parallel, the island has been under an orange weather alert due to severe thunderstorms and wind, causing localized flooding in Paphos. Meanwhile, the authorities are continuing to manage regional security issues, including the arrival of Greek F-16 jets for the Iris 2026 military exercises and ongoing investigations within the healthcare and prison systems.