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Agencies upgrade Cyprus's ratings

Staff writer |
Rating agencies Fitch, Standard & Poor's have upgraded Cyprus's ratings, citing a better than expected performance of the economy, according to statements in Nicosia.

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Fitch upgraded Cyprus's outlook to positive from stable, citing better than expected public finances performance and smaller budget deficits.

The agency also affirmed its long-term foreign and local currency Issuer Default Ratings (IDRs) at "B-", as well as the issue ratings on Cyprus's senior unsecured foreign and local currency bonds at "B-".

It said developments in public finances continued to materially exceed its April previous expectations due in part to a shallower recession and a substantially lower public deficit as a result of strong performance by tourism and the services sectors.

Fitch expects the recession to last longer than assumed under the EU/IMF program, with the economy projected to shrink by around 0.8 percent in 2015.

Standard & Poor's Ratings Services raised its long-term foreign and local currency sovereign credit ratings for Cyprus to "B+" from "B" and also affirmed the short-term foreign and local currency ratings at "B". It said Cyprus's outlook remains at stable.

"Cyprus is strongly committed to its economic adjustment program, " Standard & Poor's said, projecting Gross Domestic Product to contract by about 3 percent in 2014 against a forecast of 3.8 percent. The agency said it expects a growth of 0.6 percent in 2015.

Cyprus's government welcomed the upgrading as a positive development and vowed to continue its reforms and the streamlining of the economy.


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