Government investment expenditure, in spite of realising a higher average annual rate of growth than that anticipated by the Plan, 11% compared to 6,8% respectively, in absolute magnitudes reached the level of approximately 4ll,5 million Cyprus Pounds during the five year period 1989-93, a level very close to that anticipated by the Plan 417,4 million Cyprus Pounds. However some partial differentiations occurred in various Budgets. More specifically, the Development Budget and the Social Insurance Funds were lower than those targeted (305,5 million Cyprus Pounds target: 345 million Cyprus Pounds, and 0 million Cyprus Pounds, target: 2,4 million Cyprus Pounds respectively), while investments from the Ordinary Budget and the Cyprus Relief Fund for Displaced and Affected Persons exceeded the target (40 million Cyprus Pounds target: 17,2 million Cyprus Pounds and 66 million Cyprus Pounds target: 52,8 million Cyprus Pounds respectively). The lower investment activities of the Development Budget are basically due to the delay in the realization of some large projects, the most significant ones being the construction work of the Southern Conveyor and also the construction of the new passenger terminal building at Larnaca airport. Furthermore, no expenditure was made during 1989-93 regarding the Computerization Plan of the Social Insurance Fund, despite the fact that this had already begun in mid 1992, since the relevant agreement states that the full amount of nearly all the investment needed is to be paid as soon as the project is completed, and this is not expected to happen before the middle of 1994 (target 2,4 million Cyprus Pounds). The higher Ordinary Budget's investment activity is basically due to the satisfaction of larger needs by the Police Force in machinery and equipment, as well as to the expenditure on computerization for the technological upgrading of the public sector. The Cyprus Relief Fund's for Displaced and Affected Persons investment expenditure is higher compared to the Plan's provisions due to the undertaking of more infrastructural works and the initiation of the scheme for the replacement or repair of unsuitable houses in governmental and self-help housing estates. Moreover, the above Fund also includes investment expenditure realised from the assistance provided by the United Nations High Commission for the Refugees. This expenditure was higher than the relevant Plan's provision, for the first three years, due to the incurring of additional expenditure for new projects regarding both town planning and the agricultural sector.

The financing of the fiscal deficit during the 1989-93 was within the target framework which was set out in order to limit dependence on foreign borrowing. The only divergence from the targets occurred in 1991 when additional foreign borrowing was undertaken due both to the high fiscal deficit and also the almost full coverage of the legal margins of domestic borrowing credit limits.

Source: www.kypros.org