The rating agency Fitch on May 8, 2026, issued a statement through which it maintained the rating of the Republic of Cyprus at level A- and the outlook of the economy at positive.
The development is considered to be particularly positive, taking into account the current particularly difficult and volatile environment in which the Cypriot economy is called upon to operate, as it indicates that despite the changing international circumstances, the prospects of the economy of the Republic of Cyprus remain positive.
This assessment according to "Fitch" was mainly based:
-In the position that the effects of the war in the medium term will not dramatically affect its positive course. This position is based on the improvement of public finances and the very good fundamentals of the economy.
-Despite the fact that growth will slow down, it will remain at relatively satisfactory levels, above 2%.
-The diversification of the economy in recent years will help increase resilience in times of crisis.
-The very good fiscal course of the state (fiscal surplus of 3.4% in 2025, the highest in the EU), which is better than other countries with a similar assessment and which seems to continue despite the expected reduction of the surplus due to the international situation.
-The significant reduction of public debt in the period 2022-2025 and the fact that this reduction is projected to continue in the period 2026-2027, where it is expected to lead the public debt to close to 45%, a percentage that compares positively with other countries with a similar assessment.
-To the stability of the banking sector.
-The increase in inflationary pressures and possible upward trends in wages.
-The deterioration of the current account balance as a consequence of the war
Despite the fact that there are positive and negative factors affecting the economy at this time, Fitch believes that the negative developments are not enough to reverse the positive image of the Cypriot economy.
As the main factors that will affect the course of the evaluation of Democracy, either positively or negatively, "Fitch" consider:
-Despite the fact that growth will slow down, it will remain at relatively satisfactory levels, above 2%.
-The diversification of the economy in recent years will help increase resilience in times of crisis.
-The very good fiscal course of the state (fiscal surplus of 3.4% in 2025, the highest in the EU), which is better than other countries with a similar assessment and which seems to continue despite the expected reduction of the surplus due to the international situation.
-The significant reduction of public debt in the period 2022-2025 and the fact that this reduction is projected to continue in the period 2026-2027, where it is expected to lead the public debt to close to 45%, a percentage that compares positively with other countries with a similar assessment.
-To the stability of the banking sector.
-The increase in inflationary pressures and possible upward trends in wages.
-The deterioration of the current account balance as a consequence of the war
Despite the fact that there are positive and negative factors affecting the economy at this time, Fitch believes that the negative developments are not enough to reverse the positive image of the Cypriot economy.
As the main factors that will affect the course of the evaluation of Democracy, either positively or negatively, "Fitch" consider:
-The course of public finances, and the
-Developments in the balance of payments.
In conclusion, Fitch maintains the Republic of Cyprus at investment grade and at a high rating level with the possibility of further upgrades despite the difficult and negative environment, as it considers that the very good economic course of recent years and the fundamentals of the economy are sufficiently strong to successfully cope with the current international turbulence and continue its upward course when they subside.
The Republic of Cyprus will continue to implement a prudent fiscal and macroeconomic policy, such as that of recent years, which enables the state to maintain sufficient tools to manage international crises and to implement policies for the stability and growth of the economy, as well as socially sensitive policies aimed at protecting the vulnerable and weaker classes.
Statement by the Minister of Finance
In an international economic and geopolitical environment that is experiencing conditions of instability from the ongoing wars and given the potential risks created for the international economy with a serious impact on the economy of the European Union and by extension of Cyprus, it is really particularly pleasing for the small and open economy of Cyprus, for International Rating Agencies such as "Fitch" to certify the resilience of the Cypriot economy and maintain the creditworthiness at investment grade, keeping its outlook unchanged.
The report by Fitch, which maintains the rating of the Republic of Cyprus at investment grade A- with a positive outlook, is yet another separate and independent confirmation of the rational economic policy followed by the Government and which ensures the stability and continuous growth of the Cypriot economy.
I therefore welcome with great satisfaction the "Fitch" report, which comes as a continuation of many positive assessments of the Cypriot economy by international agencies in recent years and I assure you that the government will consistently continue its economic policy based on fiscal discipline, the reduction of public debt and a balanced development policy that supports businesses and households by creating a favourable climate for investment, Making the Cypriot economy resilient to crisis management by providing the tools for the government to implement targeted social policies that support citizens and vulnerable social classes.
