Cypriot President Nicos Christodoulides has said he is proud of the upgrade by Moody’s, and expects the development to attract quality foreign investment and generate new jobs.
Moody’s has given the Republic of Cyprus a two-notch upgrade in its credit rating, raising it from Baa2 to A3, and has changed its outlook to “stable”. The island nation now finds itself in the “A” investment category for the first time since July 2011, when a financial crisis brought the country to the brink of bankruptcy and was followed by bailouts from the European Union and the International Monetary Fund.
The Cyprus Ministry of Finance said the two-notch upgrade reflects a substantial improvement in the country’s fiscal metrics and public debt, which it expects to remain stable.
According to Moody’s, Cyprus has significantly reduced its public debt ratio from the high levels it had reached in 2020, ranking it among the countries with the largest debt reduction in the world.
It expects debt ratios to continue declining over the medium term, leading to a continued strengthening of public debt sustainability.
The credit ratings agency also noted that economic growth rates are solid, driven by the steady expansion of high-productivity service sectors supported by corporate relocations, net migration, FDI as well as NRRP (Narional Recovery and Resilience Plan)-related reforms and investments.
Moreover, it expects banking sector risks to remain “contained” given the “significant strengthening” of the credit profile of Cypriot banks in recent years and the ongoing deleveraging of the banking sector.
President declares upgrade to be of ‘exceptional importance’
The President of the Republic of Cyprus, Nicos Christodoulides, expressed his satisfaction at the development.
In a video uploaded to social media, he said that “today’s exceptionally important double-upgrade by Moody’s Rating Agency is a vote of confidence in the policies of the government and the economy of our country.
Responsible fiscal policy, financial sector stability and continuous reforms, which are at the core of our policies, are yielding positive results. Today’s great success is the result of a collective effort, first and foremost of the Cypriot people.
The new upgrade paves the way for significant prospects, while enhancing the attraction of quality investments that contribute to the creation of new jobs, as well as to the government’s efforts to establish our country as a reliable and quality investment destination.
At the same time, today’s development predicts more dynamic economic growth, enhancement of competitiveness, as well as the continuation and strengthening of targeted social measures and actions with the sole aim of improving the daily life of the Cypriot citizen.”
