DBRS confirmed Cyprus’s credit rating at A with a stable trend

Macro/Political:

Preliminary data released by the MoF showed that the State Budget
balance on a modified cash basis for the period of January – February 2026 presented a surplus of EUR 902mn, against the target of a deficit of EUR 97mn and a surplus of EUR 709mn for the same period of 2025. The State Budget Primary Balance amounted to a surplus of EUR 2,802mn, against the primary surplus target of EUR 1,957mn and a primary surplus of EUR 2,802mn in the same period of last year. Excluding an amount of EUR 126mn relating to time differentiation of payments of defense programs, an amount of EUR 591mn relating to time differentiation of PIB, as well as, an amount of EUR 200mn relating to the time differentiation of payments in other capital transfers, which do not affect the General Government’s result in fiscal terms, the over execution in the primary balance on a modified cash basis, in comparison to the budget targets is estimated at EUR 120mn.
Source: minfin.gov.gr

Markets:

NBG following a relevant announcement on September 30, 2025, announced the completion of the Etalia A transaction, which involves the disposal of a portfolio of non-performing exposures (NPEs) with a total principal amount of approximately EUR 0.1 billion to purchaser company Leon Issuer DAC, managed by Bain Capital. The transaction is capital accretive.
Source: athexgroup.gr

Macro/Political:

DBRS confirmed Cyprus’s credit rating at A with a stable trend, reflecting balanced risks to the country’s credit outlook. The Agency noted that the Cypriot economy maintained strong momentum in 2025, with real GDP growing by 3.8%, supported by solid domestic demand and rising service exports, particularly tourism. However, the recent escalation of hostilities in the Middle East has increased uncertainty for the country’s short-term economic outlook, especially for the tourism sector, while persistently high global energy prices could weaken household purchasing power and private consumption. Despite these risks, Cyprus maintains strong fiscal buffers, with the general government recording average budget surpluses of 2.8% of GDP between 2022 and 2025, while public debt declined to 60.6% of GDP in September 2025. The country’s credit rating is supported by strong fiscal performance, a well-capitalised banking sector, and a stable political environment, with EU membership also strengthening institutional quality. At the same time, the rating remains constrained by the small size of the service-driven economy, relatively low labour productivity, and a large current account deficit. Future upgrades could be driven by sustained economic growth and further reductions in public debt, while potential downgrades could result from weaker growth, fiscal deterioration, or significant liabilities emerging from the banking sector.
Source: dbrs.morningstar.com