President Nikos Christodoulides chaired an afternoon Cabinet session on Monday at the Presidential Palace and set the tone for the 2026 state budget. “It is a surplus budget, a budget of stability and outlook, with a strong social and development footprint,” he said, noting that a robust, growth-oriented economy remains one of his administration’s five core priorities.
Higher development and social spending
Christodoulides said development outlays will rise by 4.7% in 2026, on top of the 4% increase recorded in 2025 -“a particularly significant” step-up, as he put it. On social policy, after a 5.3% increase in 2025, the 2026 budget provides a further 6.7% rise for social benefits and programmes.
Public debt, he stressed, continues its steady decline: from 73.6% of GDP in 2023 to a projected 52.9% in 2026 -“among the lowest in the euro area,” with all the positive knock-on effects that implies.
Priorities and outlook
The President highlighted priority investments in education, health and social welfare, alongside the digital transformation and the green transition. For 2026, growth is expected at 3.1%, with unemployment “clearly below 5%,” around 4.6%.
Comparing Cyprus’ performance with larger euro-area economies and “while we are in the middle of two wars,” Christodoulides called the figures indicative of a responsible economic policy, one he said will continue.
“We do not experiment with the economy; we cannot play games with it. We are accountable only to the Cypriot people,” he noted, adding that the Cabinet is set to approve the administration’s third budget, for 2026.