CYPRUS: Government welcomes approval of 2019 surplus budget

A majority of Cypriot MPs have approved the government’s 2019 budget that provides for a surplus amounting to 3% of GDP.

Thirty MPs from ruling DISY, the DIKO and the Solidarity Movement voted in favour and 24 from left-wing AKEL, EDEK, Citizens Alliance, the Greens, National Popular Front and independent MP Anna Theologou voted against.

Speaking after the vote Finance Minister Harris Georgiades expressed his satisfaction over the budget’s approval.

“This is a balanced budget for the sixth consecutive year,” he said, adding the budget provides fiscal space for some tax cuts and for the implementation of new projects and reforms.

“Above all it is a budget that constitutes a tool for the broader effort to continue the path of growth of our economy… stability and positive prospects.”

The 2019 state budget provides for revenue amounting to €8.55 bln and expenditure of €7.91 bln.

The fiscal surplus is estimated at €640 million or 3% of GDP.

The Central Government primary expenditure (excluding debt servicing costs) amount to €6.27 billion.

According to the Finance Ministry, the Cypriot economy is expected to grow by 3.8% in 2019 and by 3.4% and 3.0% in 2020 and 2021 respectively.

Inflation is forecasted to reach 1% in 2018 and is expected to accelerate to 1.2% in 2019 and 1.5% and 2.0 in 2020 and 2021 respectively.

Unemployment is expected to ease to 7.5% in 2018 and will decline further to 7.0% in 2019 and is forecasted to decline to 6.3% and 5.5% in 2020 and 2021 respectively.

MPs marked the funds for the “ESTIA” scheme aiming to subsidise repayment plans for borrowers with non-performing loans that are secured by primary residences, and slashed expenditure for advisory services by 5%, while they voted against expenditure associated with privatisations.

Marked funds can only be disbursed after written consent by the House Committee of Financial and Budgetary Affairs.