The international rating agency Standard & Poor’s (S&P) confirmed the credit rating of the Republic of Cyprus at A- and upgraded the country’s outlook from Stable to Positive, according to a decision published on November 14, 2025. The agency attributes the rating to the resilience of the Cypriot economy, strong fiscal and macroeconomic performance, and the ongoing reduction in public debt.
In its analysis, S&P notes that public debt is expected to continue its downward trajectory in the coming years, supported by steady growth momentum. Mid-term GDP growth is forecast to strengthen through service exports, domestic consumption, and public and private investments implemented via the Recovery and Resilience Facility. The agency also highlights the gradual de-escalation of inflation and the improvement of the banking sector, citing a reduction in non-performing loans and a recovery in domestic credit starting from 2025.
The revision of the outlook to Positive reflects the prospects for further improving Cyprus’s external debt position through deleveraging and high service exports. S&P forecasts that continuous fiscal surpluses will reduce net public debt to 35% of GDP by 2028.
S&P emphasises that the rating rests on stable governance, Eurozone membership, and an improved banking system. However, the agency remains cautious about high external deficits and dependence on external factors. It cites the shrinking current account deficit as a prerequisite for a future upgrade and warns that a potential deterioration in geopolitical conditions or weaker performance by key trading partners could pressure the credit rating.
According to the agency’s projections, the Cypriot economy will grow at a rate of 3% between 2025 and 2028, driven by strong investment activity under the Recovery and Resilience Facility, reinforced private consumption, and increased service exports. The government states it will continue to support economic activity responsibly against challenges created by geopolitical developments, focusing on employment, fiscal stability, and the effective use of European resources.
Minister Welcomes ‘Positive’ Shift
In a written statement, Finance Minister Makis Keravnos welcomed the assessment, underlining that the agency not only confirmed the A- investment grade but also upgraded the outlook to Positive. He stated that the report is based on the resilience of the Cypriot economy, strong fiscal performance, and the continued de-escalation of public debt—a factor which, he notes, demonstrates the confidence of international rating agencies in the government’s policies.
The Minister estimates that the Positive outlook paves the way for a future upgrade, as fiscal surpluses are expected to reduce net public debt to 35% of GDP by 2028. He stressed that the successive positive ratings reflect both the creditworthiness of the Republic of Cyprus in the markets and the economy’s dynamic in an environment of increased geopolitical risks.
Mr. Keravnos stated that the government will continue to implement an economic policy oriented towards stable and sustainable growth, prioritising fiscal discipline, financial stability, and targeted policies to support citizens, especially the most vulnerable social groups.
President: Cyprus Enters ‘Enhanced Momentum’
The Republic of Cyprus enters a “trajectory of enhanced momentum” following the confirmation of its credit rating at A- and the upgrade of its outlook to Positive from Stable by Standard & Poor’s, President Nikos Christodoulides said in a written statement.
The President stated that the rating reflects the consistency and responsibility of the government’s fiscal choices, as well as the promotion of reforms that strengthen Cyprus’s position as a reliable hub for quality investments. He stressed that the benefits of this performance are tangible for citizens, mentioning a reduction in borrowing costs, strengthening entrepreneurship, and the creation of new, well-paid jobs.
He also noted that the strategic targeting for a competitive and technologically oriented economic model, with an emphasis on outward orientation, is bearing fruit and further enhances the prospects of the Cypriot economy.
