NICOSIA, Nov. 23 (Xinhua) -- Moody's has upgraded the Government of Cyprus's long-term issuer and senior unsecured ratings to A3 from Baa2, the rating agency announced on Saturday.
It's the first time the country has achieved this rating since the 2013 economic meltdown.
Moody's also set Cyprus' economic outlook to stable, saying it reflects a balance of risks related to economic, fiscal, and debt prospects.
Cyprus's President Nikos Christodoulides hailed the upgrade as a significant milestone, emphasizing that it opens the door to "significant prospects" and fosters quality investments.
All three major international rating agencies, Moody's, Fitch, and Standard and Poor's, had downgraded Cyprus's economy to junk status even before its recovery from near-bankruptcy under the Eurogroup and the International Monetary Fund in March 2013.
According to Moody's, the upgrade reflects "a material improvement in fiscal and debt metrics that we expect to be sustained." The statement noted that Cyprus has made substantial progress in reducing its government debt ratio, which is projected to reach 60 percent of GDP by 2025, down from a peak of 113.60 percent in 2020. This achievement places Cyprus among the global leaders in debt ratio reduction.
Moody's highlighted that the country's medium-term economic outlook is robust, underpinned by the consistent expansion of high-productivity service sectors. This growth is supported by company headquartering activities, net immigration, significant foreign direct investment, and reforms and investments linked to Cyprus's National Recovery and Resilience Plan.
The rating agency projects an average real GDP growth rate of 3.2 percent for Cyprus from 2024 to 2028, one of the highest among EU countries. Growth is expected to be driven by continued expansion in high-productivity sectors, including information and communication technology, finance and insurance, and business services. ■
