S&P upgrades Cyprus to A as Finance Ministry hails vote of confidence
Standard & Poor's raised Cyprus's credit rating from A- to A and kept a positive outlook, a move the Finance Ministry says reflects confidence in the island's economy.
Standard & Poor's has upgraded the Republic of Cyprus's credit rating from "A-" to "A," keeping the outlook positive, as reported by the Cyprus News Agency (CYPE). Finance Minister Makis Keravnos welcomed the decision in a statement on Saturday, saying it carries particular weight given the current climate of global instability and geopolitical tensions.
"Cyprus moves one notch higher within the investment grade category, and its credibility in international markets is further strengthened," Keravnos said. He added that the balanced, growth-oriented economic policy pursued by the government — which safeguards resilience and strengthens the fundamentals of the Cypriot economy — has been practically recognised by the agency's decision.
According to the Finance Ministry, S&P's main points include an expected continuation of economic growth at 2.7%, unless there is a significant deterioration in the Middle East, along with continued fiscal surpluses. The ministry said the sharp reduction in public debt is expected to continue, with debt projected to fall to just above 30% by 2029, while the strong labour market and ongoing private investment — foreign and domestic — are expected to boost domestic demand.
The agency noted that the current account deficit is projected to hover near 7% for 2027–2029, which it considers manageable. Among the factors that could affect Cyprus's future rating, S&P lists a possible major external shock, such as an expansion of the war in the Middle East, the trajectory of public finances, a sharper reduction in public debt, and continued inflows of foreign direct investment.
The ministry also highlighted that Cyprus has returned to the A category for the first time since 2010, having effectively recovered fully from the 2011–2013 financial crisis, and now sits just one notch below its historic high of A+ from S&P. The positive outlook means a further upgrade is possible within the next 12 months if the agency's projections materialise.
What it means for residents
The upgrade is not just a headline for economists — it can feed through to everyday costs for households and businesses on the island, from loan pricing to the cost of government borrowing.
- Borrowing costs — A higher rating usually means cheaper credit for the state, and banks often pass some of that benefit on to mortgage and business loan rates over time.
- Public finances — Continued debt reduction and fiscal surpluses give the government more room to absorb external shocks without cutting services or raising taxes.
- What to watch — The positive outlook points to a possible further upgrade within 12 months, but a major escalation in the Middle East or a global shock could change that picture.
This text is written from the source article and is not a translation of it.
