cyprus rating — cyprus rating — The credit ratings agency Fitch has reaffirmed Cyprus’ long-term A- rating with a positive outlook, emphasising the nation’s robust fiscal performance as a key factor in its resilience.
In a statement released on Saturday, Fitch highlighted strong fiscal results, ongoing debt reduction, and favourable growth prospects as essential drivers for this rating. Cyprus’ membership in the EU and Eurozone further bolsters its economic stability.
Finance Minister Makis Keravnos expressed satisfaction with the reaffirmation, stating, “It is particularly gratifying for the small and open economy of Cyprus that International Rating Agencies such as Fitch certify the resilience of the Cypriot economy and maintain its creditworthiness at investment grade, keeping its outlook unchanged.” He acknowledged the challenging economic environment but remained optimistic about the country’s prospects.
President Nikos Christodoulides also welcomed the rating, calling it a “strong vote of confidence”. He underscored the importance of maintaining this rating amidst geopolitical uncertainties, explaining how it supports businesses and promotes social policies that ultimately benefit citizens.
Fitch’s assessment noted that while Cyprus boasts several strengths, it also faces challenges, including weaker governance indicators compared to peer nations, and vulnerabilities linked to external finances and regional political tensions stemming from the island’s division.
In its analysis, Fitch considered the Cypriot economy’s resilience to external shocks, particularly in light of the ongoing war in Iran. The agency pointed out that this conflict not only affects energy prices but also has indirect repercussions on growth, external balance, and inflation rates. While these pressures are currently moderate, Fitch warned that any escalation could further strain investment, tourism, and trade.
Despite these challenges, Fitch noted that Cyprus is experiencing an economic diversification and improved public and private sector balance sheets. The agency projects that the nation will achieve the EU’s highest fiscal surplus in 2025, expected to reach 3.4 per cent of GDP.
Looking ahead, Fitch forecasts a slowing GDP growth rate averaging 2.6 per cent between 2026 and 2027, a decline from 3.8 per cent in 2025. This projection, while slightly below Cyprus’ medium-term growth potential of 3 per cent, aligns with the average growth forecast for other countries rated “A”.
Fitch cautioned that the upcoming parliamentary elections could introduce political fragmentation, although it does not anticipate any significant shifts in fiscal policy. The agency remarked, “The strong consensus across the political spectrum regarding fiscal prudence indicates that there will be no significant changes in fiscal policy.”
