articles | 08 April 2020 | ServPRO Accountants & Consultants

Cyprus’ responsible fiscal management amid coronavirus pandemic

Fitch rating agency maintains Cyprus’s long-term credit rating to BBB- changing the outlook from positive to stable. According to the Ministry of Finance, the agency highlighted the government’s responsible management both of the economy and the public finances under the present conditions due to the coronavirus pandemic.

“Fitch rating agency’s announcement maintaining the Republic of Cyprus credit rating under these adverse conditions, even with stable outlook, shows that the government’s responsible management of the economy and of the public finances remains the key to safeguarding macroeconomic stability,” the Ministry of Finance said in a recent press release.

“In these particularly difficult conditions in the global economy and international markets due to the coronavirus pandemic crisis and the economic challenges we are called on to face the Finance Ministry remains focused on maintaining the Cypriot economy’s credibility to the maximum extent and on maintaining jobs and supporting the economy,” the Ministry added.

“The state needs to preserve its fiscal buffers and must not spend all of its reserves early as no one can predict the extend of the coronavirus pandemic”, Fiscal Council President Demetris Georgiades told Cyprus News Agency (CNA).

Cyprus government has announced support measures with a direct fiscal impact amounting to €369 million while combined with deferred income to boost liquidity the measures rise to €813 million while the government is considering a guarantee scheme amounting to €2 billion. “No one can predict how long this crisis may last and therefore we should preserve firepower,” Georgiades told CNA, adding that we should take in account where we could end up in the day after when the crisis is over, where public and private debt may end up and that both these metrics must be contained on a sustainable level.

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