Cyprus has been upgraded to an A3 credit rating by Moody’s Investors Service, a two-notch increase from its previous Baa2 rating. This marks the country’s return to the “A” investment grade for the first time since the financial crisis of 2011, when Cyprus faced severe economic challenges and required bailouts from the European Union and the International Monetary Fund.
The Cyprus Ministry of Finance celebrated the upgrade, which reflects the country’s fiscal discipline and remarkable progress in debt reduction. According to Moody’s, Cyprus has significantly improved its debt-to-GDP ratio, reducing it from high levels seen in 2020, making it one of the leading countries globally in terms of debt reduction. The agency forecasts that this positive trend will continue, ensuring the country’s long-term debt sustainability.
Economic growth in Cyprus is being driven by expanding service sectors, foreign direct investment (FDI), corporate relocations, and reforms under the National Recovery and Resilience Plan (NRRP). Moody’s also noted that risks in the banking sector have been reduced, as Cypriot banks have strengthened their credit profiles through effective deleveraging strategies.
President Nicos Christodoulides expressed his satisfaction with the upgrade, describing it as a reflection of the success of Cyprus’ economic policies and the collective effort of its people. “This upgrade highlights the trust placed in our economy and paves the way for more foreign investment and job creation,” he said.
Christodoulides added that this upgrade would further enhance Cyprus’ competitiveness and provide additional momentum for policies that aim to improve the everyday lives of its citizens.
