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S&P Raises Cyprus Sovereign Rating to A

By Markets Desk · 2026-09-19 · 1 min read
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Illustration: Tradingbird

S&P Global Ratings has upgraded Cyprus' long-term credit rating to A. The agency maintains a positive outlook on the island's sovereign debt.

S&P Global Ratings has upgraded Cyprus' long-term credit rating to A. The agency maintains a positive outlook on the island's sovereign debt. This move reflects the country's improved fiscal position. President Nikos Christodoulides welcomed the decision. Finance Minister Makis Keravnos noted the result shows confidence in economic resilience. Panicos Nicolaou, chief executive of Bank of Cyprus, also praised the upgrade. The new rating signals a stronger credit profile for the market.

Fiscal Surpluses Drive Debt Reduction

S&P cites strong fiscal revenues as a key driver. The agency forecasts fiscal surpluses averaging slightly below 3 percent of GDP through 2029. Net public debt is expected to fall to just above 30 percent of GDP. Public debt will decline in both absolute terms and as a share of output. Economic growth, tax revenues, and spending controls support this trend. The government aims to reduce its debt burden further in coming years.

Services Sector Leads Export Growth

Cyprus shows significant growth in services exports. Information technology and intellectual property sectors lead this expansion. This strengthens the country's overall export base. Foreign direct investment inflows help moderate private-sector external debt. Fiscal surpluses support a substantial reduction in public-sector debt. The economy remains resilient despite regional conflicts. The impact of these external factors is manageable for the local market.

Economic Growth Forecasts Remain Strong

S&P forecasts economic growth averaging just below 3 percent through 2029. Resilient domestic demand supports this projection. The labor market remains strong with rising real incomes. Public and private investment levels are significant. Funding from the Next Generation EU program contributes to this growth. Oil price increases in 2026 and 2027 are expected. The impact on Cyprus should remain manageable despite heavy reliance on imported oil.

Based on reporting by Cyprus Inform, compiled by the Tradingbird desk.

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