Filenews 22 November 2025
The rating agency Fitch on November 21, 2025 issued an announcement through which it maintained the rating of the Republic of Cyprus at the "A-" level but improved the outlook of the economy from a stable to a positive outlook. This move, according to an announcement by the Ministry of Finance, is considered a harbinger of future upgrading if the forecasts made in the relevant report come true.
This change, according to Fitch, was due to:
a) The dramatic reduction of public debt in the period 2022-2025 and the fact that this reduction is projected to continue in the period 2026-2027 with public debt falling below the milestone of 60% of GDP (55.4%) in 2025, resulting in it being below the median debt in the EU.
b) The ongoing fiscal surpluses which are projected to continue in 2025-2027 with an average of 3.2% according to Fitch.
c) The very strong growth of the economy, which Fitch predicts will rise to the level of 3.4% for 2025, while they predict that the growth rate will remain close to 3% for the period 2026-2027 and close to 3% in the medium term. By comparison, growth in the eurozone is projected to be 1%
d) The very good picture of the labour market with unemployment falling to pre-2009 levels.
Fitch considers the following to be the main factors that will affect the course of the rating of the Republic either positively or negatively:
a) The course of public finances,
b) Macroeconomic data, and
c) Developments in the balance of payments.
Fitch maintains the Republic of Cyprus at a high rating point with the possibility of further upgrades, the Ministry adds, "recognizing the very good economic course of recent years as well as the very good prospects for the near future despite the enormous challenges presented in the international economic and political environment in recent years".
"The credibility that the Republic of Cyprus has gained in relation to fiscal discipline and rational economic policies is a necessary factor for additional upgrades to become a reality in the future," he concludes.
Periodic rating from Moody's
In addition, the Ministry of Finance states that the International Rating Agency Moody's issued a periodic rating announcement yesterday without making any change in the credit rating of the Republic of Cyprus. The announcement refers to the existing A3 tier, which "reflects the high level of prosperity of the country and the strong growth rates which they expect to continue in the medium term".
The Republic of Cyprus according to Moody's:
- has good institutional capacity and effective policy-making;
- public debt levels continue to decline steadily,
- the government continues to maintain large budget surpluses,
- the country's growth remains strong supported by the diversity of the economy,
- Arrivals in the tourism sector have returned to pre-pandemic levels, with revenues reaching historic highs and
- The stability of the banking sector is supported by large capital buffers and sufficient liquidity.
However, Cyprus faces several challenges, such as:
- the small size of the country, which makes it less resilient to shocks than a larger economy;
- expenditure pressures that pose a continuing risk to the future course of public finances and
- risks in the banking sector, which remain a key driver of sudden developments, despite the fact that they have decreased.
As pointed out in Moody's announcement, further upward upgrades could occur, provided that, among other things:
- fiscal and government debt ratios perform better than the Agency's expected expectations, and
- if there is higher than expected growth in the medium term.
In the event that the estimates for fiscal results and public debt do not perform as expected by the Agency, leading to the reversal of the downward trend of public debt, then the ratings for Cyprus could find themselves under downward pressure.
The Government, it is noted, will continue to implement a disciplined policy so that the upward trend of credit ratings continues unhindered, ensuring growth and employment while maintaining healthy public finances.
Makis Keravnos: We are working methodically for a resilient economy
The Minister of Finance, Makis Keravnos, welcomes with great satisfaction the two new credit ratings of Cyprus, by "Moody's" and "Fitch".
As he states in his announcement:
"The excellent performance of the Cypriot economy, which is due to the rational policies consistently implemented by the government of the Republic of Cyprus and which foreign rating agencies seem to trust, brings me the pleasure of this week to welcome with great satisfaction two new credit ratings of Cyprus, this time by "Moody's" and "Fitch".
Moody's in yesterday's periodic rating, maintains the reliability of the Republic of Cyprus at investment grade A3, reflecting, as noted by the Agency, the high level of prosperity of the country and the strong growth rates which they expect to continue in the medium term.
The Fitch Rating Agency, for its part, also maintains the reliability of the Republic of Cyprus at the "A-" level of investment grade, but at the same time improves the outlook of the Cypriot economy from stable to positive, a move that is considered a harbinger of future upgrading as it expects that the positive course of public finances, macroeconomic data and developments in the balance of payments will allow the agency to rank Cyprus at a higher level of investment grade.
The Government recognizes the seriousness of the challenges in an unstable and difficult international environment characterized by geopolitical turbulence, which is why it is working in a coordinated and methodical manner to consolidate a resilient economy, a fairer society, and a sustainable future for all. Our economic policy is human-centered, balanced and prudent and is based on the principles of fiscal stability and social justice, a fact that is internationally appreciated and reflected in the continuous positive assessments of the credibility of the Cypriot economy that the Republic of Cyprus has enjoyed by all major Rating Agencies in recent years."
