Fitch upgrade result of planning and policies

The government has expressed satisfaction with the recent tweaking of the island’s creditworthiness outlook from ‘stable’ to ‘positive’ by Fitch, dubbing it as a validation of the ongoing trajectory of progress and development.

In an official statement, President Nikos Christodoulides said, “this trajectory is underpinned by the government’s commitment to responsible economic policies”.

The President highlighted that the confidence bestowed by rating agencies reflects acknowledgment of the government’s strategic planning and policies.

“Through fiscal responsibility and the promotion of impactful reforms, we are reinforcing the path of sustainable development for our country, safeguarding our economy, and propelling its dynamic evolution,” stated Christodoulides.

Fitch upgraded Cyprus’ long-term rating to positive on Friday, citing economic resilience and fiscal strength.

The agency maintained the ‘BBB’ rating, previously elevated in March 2023.

Further growth

Cyprus demonstrated economic resilience with a 2.5% GDP growth in the first three quarters of 2023. Further growth is anticipated, as Fitch projects a 2.7% increase in GDP for 2024 and 3.0% in 2025.

While geopolitical tensions in the Middle East, particularly affecting Cyprus-Israel relations, pose a risk, the government aims to achieve a 2.3% GDP surplus in 2023, surpassing the previous projection of 1.7% in June. Government debt is anticipated to decrease to 79.6% of GDP in 2023, with a continued reduction to 67.4% in 2025.

Noteworthy improvements in the banking sector include a decline in non-performing loans and stable solvency metrics.

Fitch underscores the importance of Cyprus maintaining a liquid asset buffer. The positive outlook underscores both Cyprus’ economic advancement and the resilience of its banking sector.