Written Statement on the upgrade of Cyprus’s bond rating by the Moody’s Credit Rating Agency - 15/11/2014
The Government welcomes the upgrade of Cyprus’s bond rating by the Moody’s Credit Rating Agency which follows the recent successive upgrades of the economy of Cyprus by Credit Rating Agencies.
In particular, the Government considers of great importance the fact that the key drivers of the upgrade of the economy of our country were “the consolidation of the government's fiscal position, as illustrated by an expected return to a primary budget surplus from 2014, and the expectation that public debt relative to GDP will level off in 2015,” as well as “the stabilization of Cyprus's financial sector through the recapitalization of troubled banks,” which lowers the risk that bank-related contingent liabilities will crystallize on the government's balance sheet.
We also welcome Moody’s ascertainment that “Cyprus's fiscal metrics have exceeded the targets set with the Troika,” and that “the fact that the economic contraction in 2013 and 2014 was not as severe as initially expected under the programme also contributed to the government's ability to outperform its fiscal targets.”
It is noted that, according to Moody’s, “the economic and fiscal outperformance increases the likelihood of the government achieving the rest of its medium-term fiscal consolidation targets, and thereby succeeding in its objective of putting debt on a more sustainable path.”
Of course, the difficulties still exist and as the Agency notes, the basic problems that led to the country’s initial default have not yet been fully resolved and we need to remain firm and steady to the policy followed so far until we reach the goal for the full reversal of the situation and the return to a healthy and solid economy, with growth and prosperity for the people.