Ratings agency Fitch has affirmed Cyprus’s long-term credit rating at A- with a positive outlook, despite what authorities described as a difficult and volatile international environment.
In a statement issued on May 8, Fitch said the outlook for the Cypriot economy remained positive even as global conditions shifted.
According to the agency, the assessment was based largely on the view that the medium-term impact of the war would not significantly derail Cyprus’s economic trajectory, supported by stronger public finances and solid economic fundamentals.
Fitch said economic growth was expected to slow but remain at satisfactory levels above 2%.
The agency also pointed to the economy’s diversification in recent years, saying it had improved Cyprus’ resilience during periods of crisis.
Fitch highlighted Cyprus’s fiscal performance, noting a 2025 budget surplus of 3.4%, the highest in the European Union. It added that fiscal performance compared favourably with countries holding similar ratings and was expected to remain strong despite a projected decline in the surplus because of international conditions.
The agency also cited a significant reduction in public debt between 2022 and 2025, with debt levels expected to continue falling in 2026 and 2027 towards 45% of gross domestic product.
Other factors highlighted by Fitch included the stability of the banking sector, rising inflationary pressures, possible wage increases and the deterioration of the current account balance as a result of the war.
Despite positive and negative pressures affecting the economy, Fitch said adverse developments were not sufficient to overturn the positive outlook for Cyprus.
According to the agency, the main factors that could affect Cyprus’s future rating either positively or negatively are the course of public finances and developments in the balance of payments.
The statement said Fitch continued to place Cyprus in investment grade territory and saw potential for further upgrades despite the difficult international environment, citing the country’s economic performance in recent years and strong fundamentals.
The government said it would continue to pursue prudent fiscal and macroeconomic policies aimed at maintaining stability, supporting growth and protecting vulnerable groups during periods of international uncertainty.
Finance Minister Makis Keravnos welcomed the assessment, describing it as further independent confirmation of the government’s economic policy.
In a written statement, Keravnos said Fitch’s decision showed confidence in the resilience of the Cypriot economy at a time of geopolitical and economic instability caused by ongoing wars and risks to the global economy.
He said the government would continue to focus on fiscal discipline, reducing public debt and pursuing balanced growth policies that support businesses and households while creating favourable conditions for investment.