The debt-to-GDP ratio of the Republic of Cyprus fell to 72.3% based on the latest available data from the Statistical Service, with the index showing a decrease of almost 10 percentage points on an annual basis.
In particular, the general government debt at the end of June stood at €22.81 billion from €23.04 billion in absolute numbers from €23.04 billion at the end of March of the same year. Compared to June 2023, the debt of the Republic showed a decrease of €1.6 billion or 6.8%. The debt-to-GDP ratio at the end of June last year stood at 82.1%.
It is noted that at the end of June, a European medium-term bond (EMTN) of €850 million matured, while at the end of the year another EMTN bond worth €1.0 billion matures. It is recalled that the Republic issued on June 18 a 7-year bond of €1 billion, which, in combination with the other financial tools, covers the financial needs for the year, which according to the Public Debt Management Office amount to €1.3 billion.
The reduction of the debt-to-GDP ratio was significantly contributed to by the growth rate of the GDP, with the growth rate in the first half of the year amounting to 3.5% (seasonally adjusted data), which already exceeded the conservative, as the same the Ministry of Finance characterized it, forecasting a growth rate of 2.9% for the whole year. Already after the preliminary estimate of the Statistical Service for the second quarter (3.7%), the Ministry of Finance announced that it will revise the initial estimate upwards, with the new estimate expected to be recorded in the state budget for 2025, the which, as the Minister of Finance had stated at KYPE, which is expected to be approved in mid-September by the Council of Ministers.
These data give the perspective that the debt to GDP ratio at the end of the year will fell below the 70.5% that was the initial forecast of the Ministry of Finance, as recorded in the Strategic Framework of the Fiscal Perspective 2025-2028. Moreover, based on the forecasts of the Ministry of Finance, the debt-to-GDP ratio is expected to fall below the limits of the Maastricht Treaty (60%) in 2026.
