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- Ελληνικά
Confirmation of the Republic of Cyprus' creditworthiness and outlook to positive by "Standard & Poor's"
In a decision published yesterday, Friday, September 1, 2023, the international credit rating agency Standard & Poor's confirmed the Republic of Cyprus' credit rating at investment grade ("BBB") and changed its outlook from stable to positive.
Standard & Poor's justifies its decision to affirm the Republic of Cyprus' credit rating on the basis of the strong performance of the Cypriot economy over the last decade, a diversified economy that has proven relatively resilient to external shocks, and the expectation that current trends are supportive of the country's creditworthiness despite the vulnerabilities still observed in the economic, fiscal and external environment.
In addition, the agency notes that the positive outlook reflects its view that the macroeconomic environment continues to normalize from the financial crisis that erupted in 2012-2013, the new government appears to be succeeding in maintaining stable fiscal surpluses in the coming years, and that significant progress has been made in the banking sector in reducing non-performing loans despite the high stock of such loans compared to peer countries.
In the same context, Standard & Poor's highlights as the most important factors for the future credit rating upgrade of the Republic of Cyprus the continuation of the downward path of public debt, the narrowing of the high current account deficit, the improvement in the stability of the financial system, the further reduction of NPLs which could lead to a reduction in contingent liabilities for the public sector, the enhancement of the efficiency of the transmission of Furthermore, it expects the medium-term economic growth rate of the Cypriot economy to be slightly below 3% supported by further expansion of tourism and efforts to diversify the economy in the technology sector. It also cites the successful implementation of the cross-cutting reforms under the Recovery and Resilience Plan as the key to further growth of the Cypriot economy.
The Government will continue to support economic activity in view of the challenges it faces (continued war in Ukraine, inflationary pressures) in a responsible manner both in terms of growth and employment (containing unemployment) and public finances. To achieve this objective, the Government is supporting the Cypriot economy and society as a whole in a targeted and flexible manner, while promoting appropriate economic plans that will allow maximum use to be made of the European programmes and funds on offer, in particular the financial support through the Recovery and Resilience Plan.
(MB)
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