Insider Economy FinMin official calls for savings in public spending ahead of budget overhaul...

FinMin official calls for savings in public spending ahead of budget overhaul due to crisis

Cyprus Finance Ministry Permanent Secretary called on Ministries to slash public spending this year ahead a pending budget overhaul due to the crisis caused by the coronavirus pandemic and the financial package introduced by the government to support the economy.

In a circular to Permanent Secretaries of other Ministries, the Directorate – General for European Programmes Coordination and Development and the Auditor General, dated 30 March and published today, George Panteli refers to the problems facing Cyprus due to the spread of coronavirus and the measures the authorities take to shore up the economy amid the pandemic.

According to Panteli, the measures’ financing impact amount to €813 million or 3.8% of the country’s GDP in combination with the proposed public guarantee scheme of €2.0 billion. He adds that a complementary budget has been approved by the Parliament last week with a fiscal impact of €369 million or 2% of GDP.

He underlines that the government measures to limit the spreading of coronavirus “will unavoidably impact both public finances and public expenditure and consequently the provisions included in the 2020 state budget and the 2020-2022 Medium Term Budgetary Framework, as those provisions were calculated with forecasts based on different fiscal and macroeconomic data.”

“Therefore, the 2020 budget must be significantly radical to safeguard the stability of the public finances,” he stresses.

According to the FinMin Permanent Secretary, spending associated with seminars, conferences and other movements, studies of experts, outsourcing of services, equipment purchases and a number of development projects must be postponed or revised.

Panteli calls on the other Ministries and Deputy Ministries’ Permanent Secretaries to submit by tomorrow a list with operational and development expenditure that could be saved.

(CNA)

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