Newsroom
Cyprus’s long-term sovereign credit rating has been upgraded by Scope Ratings to A from A-, with a stable outlook, reflecting sharp falls in public debt, ongoing budget surpluses, and a stronger banking sector.
Finance Minister Makis Keravnos welcomed the move as “another significant upgrade” and said it shows international confidence in the government’s economic management.
Scope highlighted Cyprus’s rapid debt reduction, with public debt falling to 55.4% of GDP in 2025, down from 113.6% in 2020. The agency projects it could drop below 40% by 2030, providing more financial resilience for the country.
The rating agency also pointed to improvements in the banking sector. Non-performing loans fell to 4.2% in October 2025, while capital and liquidity levels remain well above euro area averages, boosting banks’ ability to lend and reducing risks for taxpayers.
Cyprus’s economy has continued to grow steadily. After a 3.9% GDP growth in 2024, real GDP is estimated to have expanded 3.5% in 2025, driven by private consumption, rising wages, and investment. Unemployment hit 4.3%, the lowest in almost 20 years, while inflation stayed subdued at 0.8%. Growth is forecast to remain solid at around 3% in 2026, supported by ongoing investments and consumer spending.
On public finances, Cyprus recorded another budget surplus of around 3.3% of GDP in 2025, despite wildfire-related spending, household support measures, and commitments to the National Solidarity Fund. Scope expects surpluses to remain strong through 2030, keeping Cyprus among the most fiscally stable countries in the European Union.
Finance Minister Keravnos said the rating upgrade reflects the credibility and dynamism of the Cypriot economy, citing the recent successful issuance of a 10-year government bond. He emphasized the government’s commitment to fiscal discipline while maintaining space for targeted support to citizens, particularly vulnerable groups.
Scope did caution that Cyprus’s small, open economy and some remaining banking sector vulnerabilities still limit its rating, and warned that weaker demand in European markets could pose indirect risks. Nonetheless, the agency said the stable outlook reflects a balance between strong economic performance and these structural challenges.
