Filenews 24 May 2025
On 23 May 2025, the international rating agency Fitch confirmed the credit rating of the Republic of Cyprus at level A- with a stable outlook, citing the stable fiscal path, strong growth and stability of the financial sector.
According to Fitch, this assessment is based on the following main factors:
a) The reduction of public debt in the period 2022-2024 and the fact that this reduction is projected to continue in the period 2025-2026 with public debt falling below the milestone of 60% of GDP in 2025 and will be significantly lower than the EU average.
b) Ongoing fiscal surpluses, which are projected to continue in 2025-2027, as fiscal revenues are expected to continue to grow at a faster pace than expenditures.
c) The very strong growth of the economy, which is at levels above 3%, is projected to remain close to 3% for the period 2025-2026.
d) The very good picture of the labour market
e) The positive medium-term outlook for the economy
f) The stability of the banking sector, which is characterized by very small capitalization and high liquidity.
As the main factors that will influence the course of the evaluation of the Republic either positively or negatively, Fitch considers:
a) The course of public finances, and
b) Balance-of-payments developments and other external statistics.
As stated in a relevant announcement by the Ministry of Finance, "in an uncertain geopolitical environment and an ongoing economic uncertainty stemming from recent developments in world trade, Fitch maintains the CC at a high point, recognizing the very good economic course of recent years as well as the very good prospects for the near future, despite the enormous challenges that have arisen both in the near future (crisis in the Middle East, war in Ukraine) but also the broader geopolitical environment (imposition of tariffs, disruption of international trade). The continuation of the course so far, focusing on fiscal discipline and the right economic policies, is a necessary factor in order to make additional upgrades in the future, ensuring even greater competitiveness and stability in the economy of the Republic of Cyprus.
"The Government, faithful to its policies, strongly supports the economy in a responsible and flexible way, both in terms of growth and employment, as well as in terms of public finances. In view of the challenges that the Cypriot economy is called upon to face from the developments in the international economic-political environment, the government will continue to implement those economic plans, which allow the maximum possible utilization of all the opportunities offered for continuous growth of the economy while aiming at the further reduction of public debt," he concludes.
"We continue with seriousness"
The President of the Republic sent its own message for the confirmation of the assessment of the Cypriot economy by the rating agency Fitch.
President Christodoulides in a post on platform x states the following message: "We continue seriously on the basis of the triptych: fiscal responsibility, a strong financial system and continuous and bold reforms."
