The Ministry of Finance wishes to announce that on March 10, 2023, Fitch Ratings issued a statement upgrading the Republic of Cyprus' rating from BBB- stable outlook to BBB- stable outlook.
According to Fitch, this decision is based on the following main factors in 2022:
a)
The very good fiscal performance of the government and the larger-than-expected surplus.
b) The continued path of public debt reduction.
c) The resilience of the economy to external macroeconomic shocks.
d) The improvement in banks' asset quality.
Fitch identifies the following as the main factors that will influence the future path of the Republic's rating:
a) The state of the banking sector.
b) The resilience of the economy to external shocks.
c) Public finance performance.
In general, Fitch has rated positively not only the fiscal performance over 2021-2022 but also the continued resilience of the economy to the various international crises that have unfolded in recent years. The ongoing effort to reduce non-performing loans that continued during the pandemic period and the effort to strengthen the banking sector has also begun to bear fruit.
In summary, Fitch's statement contains many positive points for the Cypriot economy despite the problems created by the broader geopolitical conditions and acknowledges its resilience and the ability of the Cypriot economy to cope with the challenges it faces. The continued improvement in the government's fiscal position and the ongoing consolidation of the banking sector are the two areas that are critical to securing further upgrades.
(MΓ)
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