DBRS confirms Cyprus’ ‘BBB’ rating

DBRS Morningstar confirmed the Republic of Cyprus’ credit rating at ‘BBB’ on Friday, with the trend remaining Stable. 

It noted that the stable outlook balances recent favorable fiscal dynamics against important downside risks for the fiscal and economic outlooks. 

Fiscal balances have recovered strongly over the past two years. 

The general government budget deficit narrowed to 1.7% of GDP in 2021 from 5.8% in 2020, driven by a strong economic growth rebound from the Covid-19 shock, which led to a marked increase in tax revenues. 

Budgetary outcomes have continued to improve over the past months despite the recent energy shock. 

In January-July 2022 the general government registered a surplus of 0.6% of GDP compared to a deficit of 3.2% of GDP in the same period in 2021.