26/01/2003 15:49
Civil servants' salaries increase by 6.7% in 2002
The Central Bank considers that the estimates of the Finance Ministry over the budget deficit for 2002 and 2003 are too ‘optimistic’, as the Ministry insists that budget deficit is to stand at 2.7% in 2002, while CB thinks that the FinMin's estimate is based upon an optimistic working hypothesis for growth rate of the economy.
In its monthly Monetary Policy Report published Friday, after its decision to keep interest rates unchanged at 5%, the Central Bank highlights that “government’s estimates refer to a budget deficit of 2.7% of GNP for 2002 and 2.1% for 2003”. According to the monetary authority, the Finance Ministry grounds its estimates on the hypothesis that GNP is to increase by 2.3% and 4.3% in 2002 and 2003 respectively.
The Central Bank believes that this is an optimistic estimate especially “if the payment of delayed pay rises and the scaled pay raises for civil servants in 2003 do not counterbalance”. The Bank has warned the Ministry that such a development entails “unfavourable consequences” for Cyprus economy.
Expenditure to reduce…salaries to increase!
In accordance with the CB Report, budget deficit for the first eight months of 2002 stands at CYP 204 million, against CYP 137 million in the corresponding period of 2001. This gap is attributable to the considerable drop of government’s revenues from income tax, as in the first eight months of 2002, the government received CYP 104 million (from the income tax) against CYP 271 million in the corresponding period of 2001.
Meanwhile, government’s revenues rose due to the VAT – partly due to its increase from 10% to 13% - reaching CYP 236 million (compared to CYP 219 million last year).
In total, revenues for the first eight months of 2002 have soared by 1.9% reaching CYP 1.258, against 11.1% (to CYP 1.234 million) in 2001. The government’s expenditures have decelerated as well - though less than revenues due to increases in state payroll expenditures. In 2001 state payroll totalled CYP 340 million (+4.7%) and in 2002 it stood at CYP 363 million (+6.7%).
The Central Bank considers that the estimates of the Finance Ministry over the budget deficit for 2002 and 2003 are too ‘optimistic’, as the Ministry insists that budget deficit is to stand at 2.7% in 2002, while CB thinks that the FinMin's estimate is based upon an optimistic working hypothesis for growth rate of the economy.
In its monthly Monetary Policy Report published Friday, after its decision to keep interest rates unchanged at 5%, the Central Bank highlights that “government’s estimates refer to a budget deficit of 2.7% of GNP for 2002 and 2.1% for 2003”. According to the monetary authority, the Finance Ministry grounds its estimates on the hypothesis that GNP is to increase by 2.3% and 4.3% in 2002 and 2003 respectively.
The Central Bank believes that this is an optimistic estimate especially “if the payment of delayed pay rises and the scaled pay raises for civil servants in 2003 do not counterbalance”. The Bank has warned the Ministry that such a development entails “unfavourable consequences” for Cyprus economy.
Expenditure to reduce…salaries to increase!
In accordance with the CB Report, budget deficit for the first eight months of 2002 stands at CYP 204 million, against CYP 137 million in the corresponding period of 2001. This gap is attributable to the considerable drop of government’s revenues from income tax, as in the first eight months of 2002, the government received CYP 104 million (from the income tax) against CYP 271 million in the corresponding period of 2001.
Meanwhile, government’s revenues rose due to the VAT – partly due to its increase from 10% to 13% - reaching CYP 236 million (compared to CYP 219 million last year).
In total, revenues for the first eight months of 2002 have soared by 1.9% reaching CYP 1.258, against 11.1% (to CYP 1.234 million) in 2001. The government’s expenditures have decelerated as well - though less than revenues due to increases in state payroll expenditures. In 2001 state payroll totalled CYP 340 million (+4.7%) and in 2002 it stood at CYP 363 million (+6.7%).
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