State budget deficit hits €1.79bn according to latest Treasury report

The Treasury has announced that the state budget deficit for 2025 reached €1.79 billion, according to its official fiscal report released this week.

The fiscal report for 2025 serves as a comprehensive review of the state budget for the previous financial year, outlining both projected and actual revenues and expenditures.

The report compares the budgeted revenues and spending with the amounts actually collected and spent during the year, taking into account supplementary budgets and any transfers of appropriations.

The Treasury explained that the preparation and submission of the report within three months of the end of the financial year is a constitutional obligation of the Accountant General of the Republic.

The report was initially submitted by accountant general Andreas Antoniades to Finance Minister Makis Keravnos on March 12, 2026.

It was subsequently forwarded by the Finance Minister to the Cabinet, which approved it on March 16, 2026.

Following this approval, the report was submitted to the House of Representatives on March 23, 2026.

The fiscal report underwent audit by the Auditor General of the Republic, whose findings are included in a separate report forming an integral part of the document.

This inclusion helps ensure the quality and credibility of the information provided, the Treasury stated.

In terms of annual results, total revenues excluding loan-related inflows amounted to €10.05bn in 2025, compared with €9.57bn in 2024.

At the same time, total expenditure excluding loan-related outflows reached €10.15bn in 2025, up from €9.89bn the previous year.

As a result, the state recorded a budget deficit of €0.10bn before net borrowing flows, compared with €0.32bn in 2024.

When factoring in inflows from loan drawdowns and repayments, which stood at €0.16bn in 2025 compared with €1.24bn in 2024, the fiscal position shifted further.

Outflows related to loan repayments and issuances totalled €1.85bn in 2025, down from €2.53bn in 2024.

Taking these figures into account, the overall budget deficit widened to €1.79bn, compared with €1.61bn recorded in 2024.

The report highlighted that taxation remained the main source of state revenue, amounting to €8.6bn in 2025, up from €8bn in 2024.

Tax revenues accounted for 86 per cent of total state income, underlining their central role in public finances.

Of this total, 44 per cent came from indirect taxes and 42 per cent from direct taxes, broadly in line with the previous year.

On the expenditure side, the largest categories included public sector wages, pensions and gratuities, which totalled €3.52bn.

Spending on social benefits reached €2.02bn, including a government contribution of €0.82bn to the General Healthcare System (Gesy), compared with €0.77bn in 2024.

Additionally, transfers amounted to €1.67bn, covering grants and contributions to public law organisations, local authorities, the European Union, international organisations and individuals.

Regarding public debt, the report indicated that the total government borrowing excluding intra-government debt stood at €19.24bn as of December 31, 2025.

This marked a decrease from €20.92bn recorded on December 31, 2024, while intra-government borrowing amounted to €13.21bn, up from €12.03bn a year earlier.