NICOSIA, Sept. 13 (Xinhua) -- Cyprus's outgoing government approved its last budget before the end of its term and an election in February to choose a new president, Finance Minister Harris Georgiades said on Wednesday.
Georgiades said that the budget for 2018 is "extremely expansionist", providing for an increase of 3.4 percent in both revenue and expenditure relative to this year's budget.
Revenue will reach 7.7 billion euros (9.15 billion U.S. dollars) and expenditure 7.5 billion euros leaving a fiscal surplus of about 1 percent of GDP, he said.
The budget will also result in primary surplus --a surplus prior to servicing the sovereign debt -- of 3.5 percent of GDP.
Georgiades said the additional revenue will not come from taxation, new or increased, but will be the result of the economic expansion, which is projected to reach 3.6 percent this year.
Cyprus was pulled back from the brink of bankruptcy in March 2013, and was in recession for consecutive quarters until the last quarter of 2015.
From then on. the economy has been expanding upwards reaching its top notch of 3.6 percent this year, which is the second higher among Eurozone countries.
The government also approved the Fiscal Framework until 2020, which provides for a continuous fiscal surplus of 1.9 percent this year, 1 percent in both 2018 and 2019 and 1.1 percent in 2020.
The budget is aiming at an economic expansion of 3.0 percent in 2018, and 2.7 percent in both 2019 and 2020.
Ministry of Finance projections say that with the expected economic results, unemployment, one of the biggest problems with which Cyprus is still faced with, will drop from present 11 percent to a single digit next year for the first time in four years and 6.5 percent in 2020.
In another development, Central Bank of Cyprus governor Chrystalla Georghadji said on Wednesday that she has notified the European Central Bank that targets regarding non-performing loans will be changed after noticing that the process has slowed down.
She is reported to consider asking banks to speed up restructuring through increasing their targets.
Red loans, standing at over 28 billion euros at the start of the crisis, have been brought down to 22 billion euros through restructuring.
But they still weight down on the banks, which have been asked by the European bank watchdog to go make provisions amounting to 50 percent of non-performing loans.(1 euro = 1.19 U.S. dollars)
