Morningstar DBRS upgrades Cyprus credit outlook to positive

The international credit rating agency Morningstar DBRS has upgraded the credit outlook of the Republic of Cyprus from stable to positive, while reaffirming the long-term sovereign credit rating at the 'A' level. This decision was announced on September 4, 2026, following the agency's evaluation of Cyprus's strong fiscal position and structural surpluses.

The agency projects that the general government debt-to-GDP ratio will decrease from a projected 49.9% in 2026 to below 40% by 2029. Economic growth is supported by robust private consumption, investment, and exports of services, with real GDP expected to grow by approximately 3.0% annually. Despite the upgrade, Morningstar DBRS noted structural vulnerabilities, including low labor productivity and a current account deficit that reached 7.3% of GDP in 2025, excluding special purpose entities.

President Nikos Christodoulides and Finance Minister Makis Keravnos welcomed the announcement as a validation of the government's fiscal responsibility and resilience. The government plans to continue its current economic strategy to further reduce public debt while maintaining fiscal buffers to mitigate risks from international geopolitical instability.