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Fitch upgrades Cyprus to A from A-

Local Eye

Nov. 9, 2026

GREECE

Macro/Political:

  • Greece issued a NAVTEX authorizing survey operations and cable-laying work for the Greece-Cyprus electricity interconnector (GSI), following the completion of the required licensing procedures. The Foreign Ministry said on Friday that the authorization followed an application submitted by French company Nexans, acting on behalf of the project owner, GSI. The decision was issued by the Foreign Minister on November 6, following a positive recommendation from the Interministerial Committee for the Granting of Marine Survey Permits. A request for the required navigational warning was subsequently submitted, and the NAVTEX was issued immediately, the Ministry added. The NAVTEX is valid for six months.
    Source: Kathimerini

CYPRUS

Macro/Political:

  • Fitch upgraded Cyprus’s credit rating to A from A-, with a stable outlook. According to the agency, the upgrade reflects Cyprus’s continued solid fiscal performance, including rapidly declining government debt and large fiscal surpluses that are considerably stronger than those of its peers, as well as strong macroeconomic performance supported by increased diversification. According to Fitch, Cyprus’s ratings are supported by income per capita above the ‘A’ median, strong fiscal outturns and policy credibility underpinned by EU and eurozone membership. These strengths are balanced by slightly weaker governance indicators than those of its peers, external financial vulnerabilities and regional political tensions related to the island’s division. Fitch projected a general government surplus of 3.2% of GDP in 2026, unchanged from 2025 and the highest in the eurozone, and also forecasts surpluses to average 2.9% in 2027–2028. It also expects general government debt to fall rapidly to 46.3% of GDP in 2026, from 52.4% in 2025, and further to just 36.6% in 2028, supported by continued high primary surpluses and strong nominal growth. Furthermore, the agency expects GDP growth of 3% in 2026–2028, well above the eurozone average and the ‘A’ median (2.2%), driven by strong domestic consumption and continued positive performance in the services sectors. Additionally, inflation is expected to reach 4% in 2026, driven by higher energy prices, before decreasing to 2.5% in 2027–2028. Credit ratings are subject to downgrade risks if there is a sharp increase in government debt-to-GDP or an external shock that heightens vulnerabilities and leads to a prolonged slowdown in economic growth. On the other hand, Fitch could upgrade Cyprus if it reduces its vulnerability to external shocks, for example, through a structural reduction in the large current account deficits (CADs) and/or increased resilience to geopolitical shocks. An upgrade could also follow a significant improvement in GDP per capita and governance towards the levels of higher-rated peers.
    Source: Fitch Ratings