Fitch Upgrades Cyprus Rating to ‘A-‘ With Stable Outlook

Fitch Ratings said it upgraded Cyprus’s long-term foreign-currency issuer default rating to A- from BBB+, with a stable outlook.

Earlier this year, S&P Global Ratings raised its outlook on the nation to BBB+ with a positive outlook, and Moody’s upgraded Cyprus to A3 with a stable outlook.

Fitch said Friday its upgrade follows a decline in Cyprus’ public debt/GDP ratio, which was among the sharpest declines among Fitch-rated sovereigns in recent years. The agency added it expects the trend to continue over its forecast period. Fitch expects Cyprus’ debt/GDP to fall to 65.5% in 2024 from a peak of 113.5% in 2020, it added.

Fitch also said it is forecasting Cyprus’s general government surplus to reach 3.9% of GDP in 2024, with a primary surplus of 5.3%, the highest in the European Union.

“We see continued strong commitment across the political spectrum to maintaining prudent fiscal policies with a focus on debt reduction, improved revenue-raising capacity and sustaining sizeable cash buffers,” Fitch said.