2008 draft Budget submitted to House

Finance Minister submitted the 2008 draft Budget to the House of Representatives for discussuion. The proposed 2008 State Budget provides for total revenues of CYP 3.27 bln (excluding loans) vs. CYP 3.11 bln in 2007 (+9.6% YoY in 2007). Total net expenditure for 2008 is expected to reach CYP 3.86 bln (excluding loan repayment) compared to CYP 3.60 bln in 2007 (+7.1% YoY in 2008).

However, total expenditure is expected to advance by an additional amount of CYP 5 mln, due to the government’s subsequent decision to reduce the tax on heating oil.

According to the Draft 2008 State Budget, GDP growth rate for 2008 is expected to reach 4% in real terms. Inflation is expected to vary between 2.3-2.5% whilst registered unemployment is expected to decrease to 4.1% in 2008 from 4.3% in 2007 and 4.5% in 2006. Public Debt is expected to be reduced to 53.2% of GDP vs. a forecasted 61.5% of GDP in 2007.