This is the fourth supplementary budget associated with the pandemic and has been approved by the Council of Ministers during its meeting on September 2, with total public expenditure included in the four supplementary budgets amounting to €510 million.

Briefing the Committee, George Panteli, the Finance Ministry’s Permanent Secretary, said the fourth supplementary budget impact on the public finances amounts to 0.4% of GDP, adding that for the period of January – July the fiscal balance was in deficit amounting to 3.2% of GDP.

Panteli said the government is expected to table to the Parliament a fifth supplementary budget in October aiming to finance additional needs that are not connected with the pandemic, noting that so far the increased public expenditure included in the previous supplementary budgets have been implemented in full.

The fiscal deficit for 2021 will not exceed 5.1%, Panteli said, noting public debt is estimated to decline to 108% in 2021, compared with 119% in the end of 2020.

According to Panteli, the supplementary budget contains increased expenditure associated with the measures aiming to mitigate the impact of the pandemic, such as, €900,000 for the plan to support the wine sector, the continuation of the income support measures of the Ministry of Labour for August 2021 with an additional €5 million, €6.3 million associated with the incentives schemes to airlines aiming to bolster air connectivity for period of January – June 2021.

The budget also provides for a total additional spending of €38 million for the continuation of the extraordinary Covid -related measures until the end of 2021, such as hiring students or health graduates for coordinating public external medical centres, staffing the rapid antigen tests mobile units, payments to the Eden resort covid rehabilitation centre, the purchase of Covid medicines and vaccines as well as rapid antigen kits.

A Ministry of Health spokesperson said of the €38 million, €15 million concern purchasing medicine and vaccines for Covid, €16.8 ml for purchasing services and €6.4 for rapid test kits. Responding to a question, the spokesperson said that so far expenditures for rapid test kits have exceeded €26 million.

Panteli also noted that the supplementary budget provides for a further €30 million solely associated with the Covid pandemic until the end of 2021.

Furthermore, an additional €11.5 million is provided to the Deputy Ministry for Tourism for the subsidised programme to support domestic tourism until the end of 2021, payments to quarantine hotels as well as other current obligations to tour operators and airlines in the context of the extraordinary scheme approved by the European Commission for the summer season.

Theofanis Tryfonos, the Deputy Ministry’s Permanent Secretary told MPs that the scheme to support domestic tourism has had significant results with 105,000 persons benefiting from the subsidised scheme until June 2021.

For the period of July – August an additional 78,000 persons stayed in Cyprus for their holidays instead of going abroad, he added.

Source: In-Cyprus