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<\/p>\nInternational credit rating agency Fitch has affirmed the Republic of Cyprus’ long-term credit rating at \u2018A-\u2019 with a stable outlook. The report highlights the government’s strong fiscal discipline, robust budget surpluses, and faster-than-expected public debt reduction\u2014factors that allow Cyprus to outperform many countries in the same rating group.<\/p>\n
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According to Fitch, Cyprus is maintaining an impressive primary budget surplus of 4.3% of GDP in 2024. The overall budget surplus has reached 5.6%\u2014the highest level in nearly two decades\u2014thanks to rising revenues and tightly controlled spending. These indicators reflect serious fiscal discipline and a proactive approach to managing global uncertainty.<\/p>\n
Cyprus\u2019 public debt has dropped significantly, from 73.6% of GDP in 2023 to 65.3% by the end of that year. If this trend continues, Fitch forecasts the debt could fall to 52.6% in 2026 and approach 45% by 2030\u2014an impressive result even among developed economies.<\/p>\n
In terms of economic growth, Cyprus is projected to maintain a steady 3% growth rate in both 2025 and 2026, slightly down from the 3.4% seen in 2024. Growth is largely driven by a strong services sector, particularly finance, tourism, and technology. The labor market also remains healthy, with employment rising by 2% and unemployment falling to 4.5%, near record lows.<\/p>\n
However, the report also notes several structural risks\u2014most notably, a persistently high current account deficit of around 7% of GDP, one of the highest in the European Union. Nevertheless, foreign direct investment (FDI) continues to offset this deficit, flowing into increasingly diversified sectors beyond traditional finance.<\/p>\n
Cyprus\u2019 banking sector is described as stable, with a Common Equity Tier 1 (CET1) capital ratio of 24.5%\u2014the highest in the EU. Non-performing loans have dropped to 6%, signaling continued progress in cleaning up bank balance sheets.<\/p>\n
Fitch pointed out that its internal rating model had actually placed Cyprus in the \u2018A\u2019 category, but external risks\u2014such as global instability and regional tensions\u2014led to a final rating of \u2018A-\u2019. Other barriers to an upgrade include relatively weaker governance compared to \u2018A\u2019-rated peers and the island\u2019s continued political division.<\/p>\n
The agency emphasized that further improvements in fiscal health and a reduction in the current account deficit could pave the way for an upgrade. Conversely, a deterioration in public finances or a major external shock could result in a downgrade.<\/p>\n
The Cypriot Finance Ministry issued a statement welcoming the report, calling it a recognition of the government\u2019s reform efforts, budget discipline, and long-term development strategy. The ministry stressed that maintaining policy stability is critical in a world still fraught with uncertainty\u2014from the war in Ukraine to tensions in the Middle East.<\/p>\n
\u201cFitch has recognized Cyprus\u2019 solid economic progress in recent years, as well as the good outlook for the near future, despite the significant challenges facing the global economy,\u201d the Ministry said.<\/p><\/blockquote>\n
The statement concluded with a renewed commitment to continue implementing sound economic plans, optimizing opportunities, and strengthening the country\u2019s competitiveness\u2014aiming for long-term growth and sustainable public finances.<\/p>\n","protected":false},"excerpt":{"rendered":"
International credit rating agency Fitch has affirmed the Republic of Cyprus’ long-term credit rating at \u2018A-\u2019 with a stable outlook. The report highlights the government’s strong fiscal discipline, robust budget surpluses, and faster-than-expected public debt reduction\u2014factors that allow Cyprus to outperform many countries in the same rating group. According to Fitch, Cyprus is maintaining an … Read moreFitch: Cyprus Outperforms \u2018A-\u2019 Peers, Eyes Debt Reduction to 45% of GDP<\/span><\/a><\/p>\n","protected":false},"author":24,"featured_media":40118,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[95],"tags":[],"class_list":["post-50570","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-europe-immigration"],"acf":[],"_links":{"self":[{"href":"https:\/\/porticoandbridge.com\/en\/wp-json\/wp\/v2\/posts\/50570","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/porticoandbridge.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/porticoandbridge.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/porticoandbridge.com\/en\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/porticoandbridge.com\/en\/wp-json\/wp\/v2\/comments?post=50570"}],"version-history":[{"count":1,"href":"https:\/\/porticoandbridge.com\/en\/wp-json\/wp\/v2\/posts\/50570\/revisions"}],"predecessor-version":[{"id":50571,"href":"https:\/\/porticoandbridge.com\/en\/wp-json\/wp\/v2\/posts\/50570\/revisions\/50571"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/porticoandbridge.com\/en\/wp-json\/wp\/v2\/media\/40118"}],"wp:attachment":[{"href":"https:\/\/porticoandbridge.com\/en\/wp-json\/wp\/v2\/media?parent=50570"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/porticoandbridge.com\/en\/wp-json\/wp\/v2\/categories?post=50570"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/porticoandbridge.com\/en\/wp-json\/wp\/v2\/tags?post=50570"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}