ManşetNorth Cyprus

Deliberations on 2025 State budget gets underway

The Parliamentary Committee on Economy, Finance, Budget, and Planning of the Turkish Republic of Northern Cyprus (TRNC) has begun deliberations on the 2025 State Budget Draft Law.

The session opened with remarks from the Committee Chair, UBP MP Resmiye Eroğlu Canaltay, followed by a detailed presentation from Finance Minister Özdemir Berova.

In her opening address, National Unity Party (UBP) MP Resmiye Canaltay highlighted the widening budget deficit, warning that 2025 would likely bring continued economic challenges.

She stressed the importance of fiscal and budgetary discipline as essential components for achieving long-term economic stability.

Finance Minister Berova provided an overview of the budget, outlining significant adjustments for 2025.

He stated that personnel expenses would include two scheduled salary increases in January and July.

Inflation estimates project a 17.83% rise during the first half of 2025 and 17% for the second half, based on data from the Statistics Institute.

Berova emphasized the need to establish a sustainable public finance balance while boosting the efficiency of the public sector and the competitiveness of private enterprises.

He underscored that the budget aimed to promote production-driven economic growth, create employment opportunities, and ensure fiscal discipline.

Structural reforms, he added, would play a key role in stabilizing the economy, directing resources toward productive sectors, and improving revenue-generation mechanisms while ensuring efficient public spending.

Turning to the broader economic landscape, Berova highlighted Türkiye’s transition from a period of high inflation to a disinflation phase, a shift he believes will positively impact the TRNC due to its direct economic ties with Türkiye.

The 2025 budget envisions a substantial increase in both revenues and expenditures compared to the previous year.

Local revenues are projected to rise by 72.9% to ₺100.16bn, while local expenditures are expected to increase by 74.68% to ₺121.78 bn.

The central government budget, approved by the Council of Ministers, sets expenditures at ₺148.24 billion TL, revenues at ₺130.62bn, and a deficit of ₺17.62bn.

The Minister also laid out plans to transition to a digital economy to minimize unregistered activities, streamline the tax system, and align with global economic shifts.

Efforts will focus on supporting investments, promoting value-added production, fostering employment and exports, and reassessing financial support for various sectors to prioritize those with higher economic contributions.

As deliberations continue, Berova underscored the government’s responsibility to implement austerity measures and take decisive steps to reduce the budget deficit.

The 2025 budget is positioned as a critical framework to navigate ongoing economic challenges while steering the TRNC toward long-term sustainability.

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