Credit Rating Agencies have given a vote of confidence in the prospects and future developments in the Cyprus economy, Finance Minister Constantinos Petrides said.
Petrides told the 1st Annual Financial Markets Forum held in Limassol that: “All Credit Rating Agencies agree that Cyprus’ economic performance, including public finances during 2021, but also the resilience it has shown in 2022 has been much better than anticipated and medium-term conditions continue to support efforts to reduce the country’s public debt.”
“Credit Rating Agencies also register the significant challenges the economy still faces, which need to be addressed, particularly NPLs in the banking sector and high levels of public and private debt.
“Essentially, Credit Rating Agencies give a vote of confidence in the prospects and future developments in the Cyprus economy.
“They base their opinion not only on the quick recovery of the economy after the crisis of 2011- 2013 and the difficult health crisis of 2020, and the consequences of the Russia-Ukraine conflict but also on their belief that in the medium term, there are strong drivers of underlying growth and robust prospects for a return to fiscal surpluses”.
Petrides further noted that “following a significant increase of debt-to-GDP to 115% in 2020 caused by the pandemic, general government gross debt resumed its sharp downward trend, reaching 103% of GDP in 2021″.
General government debt is expected to decline to about 75% of GDP in 2025.
He said the government has the resources, tools, appetite and conviction to pursue growth by differentiating its production model and investing in high-value sectors, such as ICT and green energy.
“The new production model is well represented with investments and reforms in the recently published Vision 2035 long-term Strategy and Cyprus’ Resilience and Recovery Plan.
“Cyprus has, in recent years, made significant steps in the education, research and innovation sector, exhibiting one of the highest average annual growth rates in R&I investments among the EU Member States.”
He said the government is examining revamping the old EXPO space into an innovation zone that will create new economic growth.
“The specific area (250,000 sqm) fulfils several conditions: centrally located with easy access near higher educational institutions, research centres and government services in an urban environment.”
The government has commissioned a feasibility study and a master plan to examine the prospect of creating an innovation park that needs a strategic investor.
“The well-coordinated actions by the state enabled Cyprus to be upgraded to a strong innovator, according to the recently published European Innovation Scoreboard results.
“We aspire to become a regional centre for ICT firms and a gateway for international businesses into the EU.
According to Petrides, more than 1200 companies registered with the Business Facilitation Unit and over 9000 skilled employees recently moved and currently work in Cyprus.
“Still, we keep our ears open and are aware of the challenges faced by international businesses and their workforce.
“Our efforts are focused on further promoting e-government to provide faster and more reliable services to businesses”.