Fitch Upgrades Cyprus to «A»: Public Debt Down 77% Since 2020 and Projected at 36.6% of GDP by 2028

What the 6 November 2026 upgrade actually says, and what it does not change

On 6 November 2026 the rating agency Fitch upgraded the long-term credit rating of the Republic of Cyprus from «A-» to «A», and at the same time changed the outlook for the economy from positive to stable. The Ministry of Finance published its announcement on the upgrade on 7 November 2026.

The Ministry describes this as the most recent in a series of upgrades over the past 18 months, and notes that these upgrades have come in what it calls a particularly difficult and volatile international environment.

What Fitch based the decision on

According to the Ministry of Finance, the decision rested mainly on the following factors:

• The continuing positive fiscal path of the Republic in 2026, which is projected to be maintained over the period 2027–2028.
• The continuing and exceptionally rapid reduction of public debt, which fell by 77% over the period 2020–2026 and is projected to decline to 36.6% of GDP by 2028.
• The reduction in interest expenditure as the debt comes down, which widens the available fiscal space. Borrowing costs are expected to remain manageable.
• The continuing growth and strong resilience of the Cyprus economy.
• Medium-term prospects that remain positive, supported by continuing investment activity and a very low unemployment rate, projected to settle close to 4%.
• The stability of the banking sector, which has addressed to a significant degree the problems of the previous decade, with non-performing loans at an extremely low level, below 2%.
• The current account deficit, which is expected to remain at a high but manageable level.
• The expected easing of inflationary pressures over the coming years.

What Fitch says it will watch next

The Ministry lists four factors that Fitch identifies as capable of affecting the future course of the rating, positively or negatively:

• The course of public finances.
• Macroeconomic developments.
• Developments in the balance of payments.
• Structural changes in the economy.

Our read

The following is our own commentary and is not part of the Ministry of Finance announcement.

A sovereign upgrade changes no tax rate, no filing deadline and no compliance obligation. Nothing in this announcement alters what a Cyprus company owes or when it must file. What it changes is the starting position in a conversation.

When a Cyprus holding structure is put in front of a foreign bank opening an account, a group auditor assessing country risk, or an investor who has never looked at Cyprus before, the sovereign rating is one of the first data points they check and one of the few a client cannot argue with. A rating of «A» with debt projected at 36.6% of GDP is a materially different opening position from the one Cyprus had a few years ago, and it tends to shorten the part of the discussion that is about the jurisdiction rather than about the business.

It is worth being precise about the debt figure, because it is easy to misquote. The Ministry states that public debt fell by 77% over the period 2020–2026 and is projected to reach 36.6% of GDP by 2028. Those are two different measures and should not be merged into a single claim.

Source

Ministry of Finance, Ανακοινωση του Υπουργειου Οικονομικων αναφορικα με την αναβαθμιση τησ Κυπριακησ Δημοκρατιασ απο τον Οικο Πιστοληπτικησ Αξιολογησησ Fitch, 07/11/2026, published on gov.cy.

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