Cyprus Cabinet Approves 2002 Budget

by Lorys Charalambous, Tax-News.com, Cyprus

24 September 2001

The Cyprus 2002 Budget is due to be tabled before the Parliament on October 4 following the Cabinet's approval last week after an emergency meeting to discuss the economy in the light of the terrorist attacks on America.

Finance Minister Takis Klerides told reporters last week that the budget fulfilled the country's pre-accession economic programme which should result in a balanced budget by 2004. The budget provides for a fiscal deficit of 2.4 per cent which is well under the Maastricht Treaty ceiling of 3 per cent, and for expenditure of £2.7 billion compared to £2.3 billion in this year's Budget.

Under the Budget, government revenue will be raised to £2.07 billion from £1.66 billion resulting in a deficit of £655.6 million which is down from the originally forecast £704.4 million as public expenditure is limited and tax collection has been enhanced.

Klerides declared that the economy had experienced positive growth this year of 4.5 per cent and the forecast for 2002 is 4 per cent - well above the 2.8 per cent average growth predicted for the European Union.

In response to journalists' questions over the effect that the terrorist attacks may have on the Cypriot economy, he said: 'We had meetings and examined the consequences of a possible negative development. We looked at ways and measures of dealing with such a situation but come a world crisis, Cyprus would not escape the consequences that the other countries would suffer.'

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