2023 state budget debate begins

A three-day session of parliament to discuss the government’s 2023 state budget begins on Tuesday.

The budget is the tenth and last under President Nicos Anastasiades’ administration.

The budget provides for total revenue of €11.7 bln and expenditure of €11.3 bln resulting in a fiscal surplus of €0.46 bln, corresponding to 1.7% of GDP.

A primary surplus (excluding debt servicing expenditure) is estimated to reach 3%.

It features an increase of 12% in development projects and increased social protection spending, while debt servicing expenditure is estimated to drop by €500 mln.

Moreover, GDP growth is forecast to decelerate to 3% from a projected 6% rise this year.

So far, only left-wing AKEL has announced it will vote against the budget. The three-day debate will culminate on Thursday with the vote.

The House Finance and Budgetary Affairs Committee convened on Monday to approve government amendments to the budget, which entail an additional expenditure of €55 mln, including €20 million for financing the new Professional Pension Scheme for wider public service employees hired after October 1, 2011.

The Finance Ministry has requested the committee not to freeze public expenditure that would create problems for the smooth functioning of the public service in the first three months of 2023, as the parliament will be closed until March due to the presidential elections in February.

The parliament habitually blocks specific provisions of the annual state budget, which then has to gain the approval of the parliamentary committee on financial and budgetary affairs before they can be disbursed.

Presidential elections are scheduled for February 5.

If no candidate gathers more than 50% of the vote, a run-off will be held on February 12, with the new government expected to assume office on March 1.