Filenews 23 November 2024
Moody's upgraded Cyprus' rating by two notches to A3, supporting the upgrade on the significant improvement in fiscal aggregates and debt management, which is expected to be maintained.
With this decision, the Republic of Cyprus (RoC) is classified for the first time since July 2011, by a firm with which it maintains a contractual relationship, in category A of the credit grades and specifically in grade A3.
The double upgrade reflects the substantial improvement in fiscal and public debt ratios, which according to the rating agency are expected to remain stable.
The RoC has significantly reduced its public debt ratio from the high levels of 2020, ranking it among the countries with the largest debt reduction in the world. We expect debt ratios to continue declining over the medium term, favouring a continued strengthening of public debt sustainability.
In addition, Moody's notes that economic growth rates are stable, due to steady expansion from high-productivity services sectors supported by corporate headquarters, net migration, significant foreign direct investment, as well as reforms and investments related to the Recovery and Resilience Plan.
The change in the outlook of the economy from positive to stable reflects the balance of risks related to the economic, fiscal and debt outlooks.
In addition, we expect that banking sector risks, which guide our rating in this area, will remain contained due to the significant strengthening of Cypriot banks' credit profiles in recent years and the ongoing deleveraging of the banking sector.
Further upward upgrades could occur, provided that, inter alia, fiscal and public debt ratios perform better than expected by Moody's.
The Government will continue to pursue a disciplined policy so that the upward trend in credit ratings continues unhindered, safeguarding growth and employment while maintaining sound public finances.
President Christodoulides: Double upgrade is extremely important
Today's double upgrade by Moody's is a vote of confidence in the policies of the Government and the economy of our country.
I am proud of the steady upward trend of the Cypriot economy, whose growth rates are among the highest in the EU. For the first time after 13 years, our country is rated A by this rating agency.
Responsible fiscal policy, financial sector stability and continued reforms that are at the core of our policies bring positive results. Today's great success is the result of a collective effort and primarily of the Cypriot people.
The new upgrade paves the way for significant prospects, while enhancing the attraction of quality investments that contribute to the creation of new jobs, but also to the Government's effort to establish our country as a reliable and quality investment destination.
At the same time, today's development prescribes more dynamic economic growth, strengthening competitiveness, as well as the continuation and strengthening of targeted social measures and actions with the sole aim of improving the daily life of Cypriot citizens.
