First A-level credit rating for Cyprus

Scope Ratings has upgraded Cyprus’ credit rating to A- from BBB+, marking the country’s first A-level rating from a major credit agency.

Scope Ratings has upgraded Cyprus’ credit rating to A- from BBB+, marking the country’s first A-level rating from a major credit agency.

This upgrade reflects Cyprus’ improved economic stability, positive fiscal outlook, and reduced risks in the financial sector. The upgrade is seen as a significant milestone, highlighting the country’s strengthened financial footing and forecasting stability for the future.

Several key factors contributed to the upgrade, including Cyprus’ strong fiscal performance, which is evident in a steady reduction of national debt from 115% of gross domestic product in 2020 to 77.3% in 2023. The debt level is projected to decrease further, potentially below 60% by 2026 and under 50% by 2029. 

Scope also forecasts fiscal surpluses of about 3% of GDP for 2024 and 2025, with long-term budgetary discipline expected to yield an average surplus of 1.8% from 2026 to 2029.

Economic growth remains strong, with Cyprus’ GDP growth rate projected at 3.2% in 2024, outpacing the eurozone average. Contributing factors include robust demand fueled by decreasing inflation, low interest rates, and a low unemployment rate of 4.6%.