DBRS Morningstar changes Cyprus’ outlook to ‘positive’

DBRS Morningstar confirmed on Friday the Republic of Cyprus’ Issuer Ratings at BBB (low) and changed the trend to “positive” from “stable.”

In a statement, the Canada-based rating agency said the positive trend reflected DBRS Morningstar’s expectation that Cyprus’ public debt ratio will most likely return to its pre-pandemic downward path starting this year underpinned by a solid economic growth, fiscal repair, and a reduction in the cash buffer.

Covid-19 continues to pose challenges and bring uncertainties to the economic and fiscal outlook, however DBRS Morningstar takes a favorable view of Cyprus’ relative economic performance and improving health situation.

Despite the importance of tourism-related activities, the Cypriot economy has proven more resilient than anticipated, setting the conditions for strong growth in the medium term, it added.