Nicosia, Cyprus. Fitch on Saturday confirmed Cyprus’ long-term A- credit rating with a positive outlook, citing strong fiscal results, ongoing debt deleveraging, favourable growth prospects and EU and Eurozone membership.
Fitch assessment
Fitch said these factors support Cyprus’ fiscal resilience. The agency noted that Cyprus’ strengths are balanced against comparatively weaker governance indicators than those of peer countries, as well as vulnerabilities related to external finances and regional political tensions linked to the island’s division.
Statements from government officials
Finance Minister Makis Keravnos said it was particularly gratifying for Cyprus that international rating agencies such as Fitch certify the resilience of the economy and maintain its creditworthiness at investment grade, keeping its outlook unchanged.
Referring to what he described as a volatile environment, Keravnos said the developments were especially positive and that the economy’s prospects remained broadly favourable despite ongoing uncertainty.
President Nikos Christodoulides described the rating as a strong vote of confidence in the country’s economic course and underlined its importance in the current geopolitical context, citing wider impacts on the economy, society and the market.
He said strengthening the country’s credibility acts as a shield for the economy, a supporting force for businesses and a prerequisite for a social policy that returns tangible benefits to citizens.
External risks and regional developments
In assessing Cyprus’ creditworthiness, Fitch considered the resilience of the economy to external shocks, including the war in Iran, given Cyprus’ geographical position and energy dependence.
Fitch said the war is impacting energy prices and indirectly affects growth, external balance and inflation.
What do you think Fitch’s decision could mean for Cyprus’ economy in the current geopolitical environment?
