World Economy

Moody’s Upgrades Cyprus

Moody’s Upgrades CyprusMoody’s Upgrades Cyprus

The Moody’s international rating agency has raised Cyprus’ credit grade by one notch to Ba3, citing strong economic growth and the government’s solid fiscal performance, AP reported. The agency said Friday it is also keeping a positive outlook on the east Mediterranean island nation’s economy. Moody’s says it expects growth to be sustained by private consumption and increased revenue from record tourism that accounts for around 13.2% of Cyprus’ economy. The agency says Cyprus has also continued to outperform fiscal targets, helping to push down a high debt burden that in 2016 was 108% of gross domestic product. Cyprus nearly went bankrupt in 2013 when a banking crisis coupled with overspending forced it to seek a multibillion-euro rescue deal from its eurozone partners and the International Monetary Fund. Following three years of severe economic contraction, the economy returned to growth in 2015, expanding by 1.7% followed by an acceleration of 2.8% in 2016 in real terms. We expect this momentum to be sustained over the medium term, driven in particular by private consumption supported by favorable developments in the tourist sector and labor market.

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