Moody's gives Cyprus the 'A' investment category for the first time in 13 years!
Moody's has given the Republic of Cyprus a two-notch upgrade in its credit rating, raising it from Baa2 to A3, and 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.
Cyprus' Finance Ministry said the two-tier 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 reached in 2020, ranking it among the countries with the largest debt reduction in the world.
It expects debt ratios to continue to decline in the medium term, leading to a continued strengthening of public debt sustainability.
The credit rating 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 reforms and investment. linked to the NRRP (National Recovery and Resilience Plan).
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 continued deleveraging of the banking sector.
The President of the Republic of Cyprus, Nicos Christodoulides, expressed his satisfaction with this development. In a video posted on social networks, he said that “today's extremely important double upgrade by Moody's Rating Agency is a vote of confidence in the government's policies and our country's economy.
Responsible fiscal policy, stability of the financial sector and ongoing 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 improvement paves the way for important prospects, while increasing the attraction of quality investments that contribute to the creation of new jobs, as well as the government's efforts to establish our country as a reliable and quality investment destination.
At the same time, today's development foresees more dynamic economic growth, increased competition, as well as the continuation and strengthening of targeted social measures and actions with the sole purpose of improving the daily life of the Cypriot citizen".
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