Credit rating agency S&P has reaffirmed Cyprus’s sovereign rating at A- with a positive outlook, the Finance Ministry announced on Saturday morning, a day after the agency issued its assessment on Friday evening.
The ministry said the decision, taken against a backdrop of global instability, reflected S&P’s view that Cyprus’s economic fundamentals remain sound and that the country’s positive trajectory of recent years is expected to continue once conditions normalise, despite the impact of the war in the Middle East.
S&P said economic growth was expected to continue unless the situation in the Middle East deteriorates significantly, with expansion forecast at around 3% — below recent years but still high by European standards — alongside continued fiscal surpluses.
The agency also pointed to a significant reduction in public debt and a broader decline in external debt driven by growing services exports, both of which it said had strengthened Cyprus’s resilience.
It further cited satisfactory economic governance, a stronger financial sector, falling non-performing loans and credit growth as positive factors.
S&P identified the Middle East conflict as the principal near-term risk, but said Cyprus was well placed to manage it. Beyond the war, the agency said the future trajectory of Cyprus’s rating would depend on the path of public finances, macroeconomic performance and the continued inflow of foreign direct investment.
The Finance Ministry said the confidence reflected in the rating stemmed from the government’s commitment to fiscal discipline and sound economic policy, pointing to its handling of the Covid-19 pandemic and the early stages of the Russia-Ukraine war as evidence of effective crisis management.
Finance Minister Makis Keravnos said in a written statement that the S&P assessment, issued amid geopolitical and economic instability caused by ongoing conflicts, represented “an independent confirmation of the government’s rational economic policy”.
He said that policy was built on fiscal discipline, public debt reduction and a balanced growth strategy supporting businesses and households. “I express my satisfaction and send the message that Cyprus is a pillar of safety and stability and we look forward to welcoming our tourists and visitors to a safe, European Cyprus,” he said.
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