S&P upgrades Cyprus to BB+

On Friday, 17 March 2017, Standard Poor upgraded the Cyprus long-term credit rating to BB+ from BB marking the second consecutive upgrade since September 2016. The upgrade confirms the Cypriot economy`s growth prospects as well asthe stable and sustainable fiscal path and reaffirms the government`s commitment to a balanced budget policy.

Notably, Minister of Finance, Mr. Harris Georgiades, told CNN:

“This upgrade constitutes a very credible confirmation of the Cypriot economy`s growth prospects as well as a confirmation of the stable and sustainable course of the public finances as well.”

Mr. Harris Georgiades also highlighted that fact that the upgrade is received one year after Cyprus exit from the financial assistance package. Specifically, he noted:

“This precisely confirms that no fiscal relaxation or growth slack took place in the last year but in fact these were maintained and strengthened”.

The Minister also emphasized that the government has taken actions to ensure that bad practices of the past are not repeated through measures such the indefinite freeze in hiring in the public sector as well as the agreement with the civil servants trade union for no salary increments for the period of 2017 and 2018.

S&P’s expectation for the Cypriot economy is to expand by about 2.7% this year and maintain average annual growth at just under 2.5% between 2018-2020.