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Fitch, the International Rating Agency, upgraded Cyprus' long-term rating to positive, citing economic resilience and fiscal strength. The agency affirmed the 'BBB' rating, previously upgraded in March 2023. Cyprus displayed economic resilience with a 2.5% GDP growth in 2023's first three quarters. Fitch projects further growth, expecting a 2.7% GDP increase in 2024 and 3.0% in 2025.
Geopolitical tensions in the Middle East pose a risk, especially impacting Cyprus-Israel ties. The government is expected to achieve a 2.3% GDP surplus in 2023, exceeding June's projection of 1.7%. Government debt is anticipated to decline to 79.6% of GDP in 2023, with ongoing reductions to 67.4% in 2025.
Banking sector improvements include declining non-performing loans and stable solvency metrics. Fitch emphasizes the importance of Cyprus maintaining a liquid asset buffer. The positive outlook underscores Cyprus' economic progress and banking sector resilience.
[Information sourced from CNA]
