Another vote of confidence in the Cyprus economy: Fitch confirms positive trajectory

Following the double upgrade of the Cypriot economy by Moody's last week, a report released by Fitch Ratings, analysing economic developments within the European Union, includes references confirming the positive trajectory of Cyprus' economy.

Specifically, according to the credit rating agency:

• Cyprus continues to benefit from the economic reforms it has implemented, with the economy described as resilient despite external challenges.
• Fiscal performance has improved, and Cyprus has successfully reduced public debt to more sustainable levels.
• GDP growth is expected to remain positive, with the gradual restoration of the country's strong economic fundamentals, despite uncertainties in the broader EU and global regions.

The agency maintains a positive outlook for Cyprus (BBB+), reflecting ongoing progress in reducing long-term macroeconomic and external imbalances and improving fiscal performance.

Overall, Fitch's report acknowledges Cyprus' positive trajectory and the signs of economic recovery, while emphasising that the country is on a positive path for the coming years, even though external risks persist.

The Government's Perspective

In a statement, Government Spokesman Konstantinos Letymbiotis highlighted that Fitch Ratings' announcement, coupled with the significant double upgrade by Moody's on 22 November, which places Cyprus in the A grade for the first time in 13 years, is an undeniable vote of confidence in the Cypriot economy, the government's policies, and the collective efforts of the state and society that are delivering tangible results.

He noted that the continuous, successive upgrades of the Cypriot economy demonstrate its resilience and upward momentum—key elements for improving the daily lives of households and businesses.

"The upgrade of Cyprus," the spokesman stated, "creates a more favourable environment for households and businesses, boosting economic growth, reducing borrowing costs, and increasing confidence in the country’s economic prospects. Entrepreneurs and households can benefit from a more stable and favourable economic situation, with prospects for an improved quality of life and more opportunities."

Expanding on this, Letymbiotis pointed out that the improved credit rating of the Cypriot economy can lead to reduced borrowing costs.

"Our country is considered more reliable for investors," he stressed, adding that this could lead to lower interest rates for households, whether for mortgages, consumer loans, or loans for small businesses.

"Households can thus benefit from more affordable financing for property purchases or other major investments," he said, highlighting that the improved credit rating could lower interest rates for business loans, enabling businesses to more easily fund their growth or make investments with less capital.

According to the spokesman, enhancing investor confidence and attracting external business players increases the likelihood of drawing more investments to Cyprus, both domestic and foreign, as the upgrade fosters a sense of stability and long-term growth.

"This increase in our country's competitiveness translates into more job opportunities and higher incomes. On this stable path, we will continue to exercise responsible governance," Letymbiotis concluded.