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S&P Affirms Cyprus's 'A-' Rating with Positive Outlook

Published March 21, 2026, 09:28
S&P Affirms Cyprus's 'A-' Rating with Positive Outlook

S&P Global Ratings has affirmed Cyprus's long-term credit rating at 'A-' and the short-term at 'A-2', while maintaining a 'Positive Outlook' for the Cypriot economy. The positive outlook reflects the agency's view that Cyprus's external performance could exceed its projections over the next two years, despite uncertainties stemming from the ongoing conflict in the Middle East. S&P anticipates strong economic growth in Cyprus in the coming years, with an average GDP increase of 2.8% between 2026 and 2029, driven by robust domestic demand. According to the agency, domestic demand will become a more significant growth driver, with private consumption benefiting from higher real wages and private investments, complemented by public investments funded by the 'New Generation – EU' plan. Furthermore, the fiscal surplus is expected to exceed 3% of GDP by 2029, reducing the general government net debt to slightly above 30% of GDP. Inflation, which remained low at the beginning of 2026 (0.9% in February), is projected to rise above 2% due to potential energy price increases. Despite the conflict in the Middle East, S&P believes the Cypriot economy will maintain its strong growth, due to its resilience and adaptability to external challenges. Overall, the affirmation of the rating and the maintenance of the positive outlook are positive signs for the Cypriot economy, indicating S&P's confidence in its ability to navigate challenges and achieve sustainable growth.