Credit rating of Cyprus raised to investment grade. Good news!

Credit rating of Cyprus

Cyprus economy has been rapidly growing since early 2017 and, of course, this situation affects the international ratings. Credit rating of Cyprus has been gradually rising since 2016.

The international rating agency Standard & Poor’s raised the credit rating of Cyprus to the investment grade “BBB-“. Also the agency revised the forecast from stable to positive. Ratings below this bar are considered dangerous for investment and are commonly referred to as “junk bonds”.

Cyprus was in the “junk” category for seven years, since January 2012. S & P Global Ratings downgraded the sovereign rating of Cyprus immediately byo two levels at that point of time. Since thenthe credit rating of Cyprus was “CCC+” with a negative outlook.

According to the rating agency, the Cypriot authorities eliminated bad assets. They also managed to significantly reduce non-performing loans in the banking sector. Restructuring of the financial sector, of course, will continue. Nevertheless, the agency warns that several years must pass til the moment when it will start boosting economic growth of the country.

Standard & Poor’s noted that if Cyprus manages to consolidate the results,  its economy will continue to develop. Cyprus, most probably, will be able to demonstrate growth rates observed before the financial crisis. In this case, the agency may increase credit rating of Cyprus within the next 12 months.

The most actively growing sectors of the economy were “Hotels and restaurants”, “Wholesale and retail trade”, “Construction”, “Production”, “Professional, scientific and technical activities” and “Administrative and ancillary services.” The Ministry of Finance of Cyprus expects economic growth at 4% this year and 3.6% next year.

S & P expects that thanks to sustained economic growth, reasonable foreign policy and government support for the banking sector, Cyprus will be able to show budget surpluses and significantly reduce public debt by 2021.

Investments in Cyprus

Our company Harakis provides advice on investment packages. Subscribers may decide to invest in a combination of business equity, financial assets and real estate.

In collaboration with Merit Group, we perform financial feasibility studies on projects to determine future returns and assess investment viability. We will highlight the primary issues and implications of any project in all key business areas. A feasibility study can help forecast and assess organizational, financial and marketing concerns as well as technical setbacks.

We can assist in all financial, legal and tax optimization matters related to the acquisition and maintenance of property in Cyprus, as well as helping our customers achieve an attractive return on investments.