S&P shifts Cyprus view to positive

S&P said it revised Cyprus’ positive from stable and affirmed the BBB- long-term foreign- and local-currency sovereign ratings.

The Cypriot economy is set to recover with an average of 3.7% growth per year from 2021-2024. “Much stronger growth than expected in second-quarter 2021, at 12.8% compared with second-quarter 2020 according to the latest flash estimate, points to a potentially even faster recovery this year. However, tourism activity will take longer to recover, despite better-than-expected performance so far in 2021. We anticipate that strong growth and the return to budget surpluses will allow gross general government debt to GDP to decline rapidly to less than 90% in 2024 from about 119% in 2020,” S&P said in a press release.

The outlook reflects the view that, following pandemic-induced recession in 2020 and beyond the related near-term uncertainty in 2021, the agency said it could upgrade Cyprus within the next 24 months if the country's economic and budgetary performance continue to strengthen, supported by the government's implementation of structural reforms.

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